The intrastate liquids and natural gas pipeline transportation services we provide are subject to various state laws and regulations that apply to the rates we charge and the terms and conditions of the services we offer. These state commissions have generally not been aggressive in regulating common carrier pipelines and generally have not investigated the rates or practices of petroleum pipelines in the absence of shipper complaints. However, a state regulatory commission could investigate our rates if such a challenge were filed and any adverse decisions could adversely affect our revenue, financial position, results of operations, and cash flows.

There are various risks associated with greenhouse gases, climate change legislation or regulations, and increasing societal expectations that companies address climate change that could result in increased operating costs, reduced demand for our services and reduced access to capital markets.

Climate change continues to attract considerable attention in the United States. Numerous proposals have been made and could continue to be made at the international, national, regional and state levels of government to monitor and limit existing emissions of greenhouse ~~gases (“GHGs”) as well as~~gases. These efforts have included consideration of cap-and-trade programs, carbon taxes, climate-related disclosure obligations, and regulations that directly limit greenhouse gas emissions from certain sources. While it presently appears unlikely that comprehensive climate change legislation will be passed by Congress in the near future, energy legislation and other regulatory initiatives are expected to ~~limit or eliminate future emissions. In~~be proposed that may be relevant to greenhouse gas emissions issues. Moreover, in 2021, President Biden issued several executive orders that committed to substantial action on climate change and ~~called for,~~released “The Long-Term Strategy of the United States: Pathways to Net-Zero Greenhouse Gas Emissions by 2050,” which establishes a roadmap to net zero emissions in the United States by 2050 through, among other things, ~~the increased use of zero-emission vehicles by the federal government, the elimination of~~improving energy efficiency, decarbonizing energy sources via electricity, hydrogen, and sustainable biofuels, eliminating subsidies provided to the fossil fuel industry, and increased emphasis on climate-related risk across governmental agencies and economic sectors. As

- 37 -

a result, our operations, and those of our customers, are subject to a series of regulatory, political, litigation, and financial risks associated with the transport of fossil fuels and emission of ~~GHGs.~~greenhouse gases.

The EPA has adopted rules that, among other things, establish construction and operating permit reviews for ~~GHG~~greenhouse gas emissions from certain large stationary sources, require the monitoring and annual reporting of ~~GHG~~greenhouse gas emissions from certain petroleum and natural gas sources in the United States or require control or reduction of emissions of ~~GHGs,~~greenhouse gases, including methane, from such sources. In 2021, the EPA announced its intent to reconsider and revise ~~these~~ rules related to the oil and gas sector (primarily oil production and natural gas production, distribution, and storage) to further reduce ~~GHG~~greenhouse gas emissions, and ~~issued~~on December 6, 2022, the EPA proposed a ~~proposed rule~~supplement that would ~~extend~~revise and expand the 2021 proposal. Separately, the Bureau of Land Management (“BLM”) has also proposed rules to ~~existing petroleum~~limit venting, flaring, and ~~natural~~methane leaks for oil and gas ~~sources.~~operations on federal lands, which could in turn adversely impact production of oil and gas on federal lands and reduce demand for the services we provide in those areas. More recently, in January 2023, the CEQ released updated guidance for agency consideration of greenhouse gas emissions and climate change impacts in environmental reviews, which includes, among other recommendations, best practices for analyzing and communicating climate change effects. In addition, the EPA, together with the DOT, implemented ~~GHG~~greenhouse gas emission and corporate average fuel economy standards for vehicles manufactured in the United States, which standards were revised in December 2021 to impose more stringent requirements for emissions reductions. President Biden also reinstated the Interagency Working Group on the Social Cost of Greenhouse Gases in 2021 and directed the group to publish interim estimates of the social cost of carbon dioxide, nitrous oxide, and methane, with a view to using such estimates in federal rulemakings greenhouse gases, which it did. In November 2022, the EPA published a draft report assigning new and higher social cost values to greenhouse gas emissions for use in its rulemaking initiatives. These and other federal efforts to reduce ~~GHG~~greenhouse gas emissions from the transportation sector could increase our operating costs or reduce demand for our customers’ products.

In March 2022, the SEC issued proposed rules that, if adopted, would require public companies to include certain climate-related disclosures in their registration statements and periodic reports, including information about climate-related risks, climate-related financial statement metrics, and greenhouse gas emissions. In November 2022, the Biden Administration issued a proposed rule that would require government contractors to publicly disclose their greenhouse gas emissions and set emissions reduction targets, which could affect us if we enter into contractual and business arrangements with government contractors.

Internationally, the United Nations-sponsored Paris Agreement requires member nations to submit non-binding, individually determined emissions reduction goals every five years after 2020. In 2021, the United States rejoined the Paris Agreement and issued its corresponding “nationally determined contribution” (“NDC”) to reduce economy-wide net ~~GHG~~greenhouse gas emissions 50-52% below 2005 levels by 2030. While the NDC does not identify specific actions necessary to achieve these reductions, it lists several sectors as pathways for reductions, including the power, transportation, building, industrial, and agricultural sectors. The administration has acknowledged that a combination of regulatory actions and legislation will be necessary to achieve the U.S. NDC. In regards to legislation, in November 2021 the United States enacted a nearly $1 trillion bipartisan infrastructure law, which provided significant funding for electric vehicles and clean energy ~~technologies. A separate~~technologies, and in August 2022 the United States enacted the Inflation Reduction Act of 2022, which allocated $369 billion to climate ~~spending bill known as the Build Back Better Act, which could impose a fee~~change and environmental initiatives, including transportation electrification, fees on and greater regulation of methane emissions, ~~among other GHG provisions, remains under consideration in the U.S. Congress. Ultimately,~~and support for green energy manufacturing programs. Certain of these initiatives are subject to ongoing litigation, and the impacts of these ~~orders,~~international initiatives and the terms of any legislation or regulation to implement the United States’ commitment under the Paris Agreement remain unclear at this time.

Additionally, various states and groups of states have adopted or are considering adopting legislation, regulations or other regulatory initiatives that are focused on such areas as ~~GHG~~greenhouse gas cap and trade programs, carbon taxes, reporting and tracking programs, restriction of emissions, electric vehicle mandates and combustion engine phaseouts. Any such legislation or regulatory programs could also increase the cost of consuming, and thereby reduce demand for, the crude oil and refined products that we deliver.

Increasing societal expectations that companies address climate change, including international, federal, state and local rules and regulations relating to climate change driven by such societal expectations, and use of substitutes for energy commodities may result in increased costs, reduced demand for our customers’ products and our services, reduced profits, increased investigations and litigation, diversion of financial resources from other initiatives and negative impacts on our unit price and access to capital markets. To the extent that societal pressures or political or other factors are involved, it is possible that such liability could be imposed on us without regard to our causation of or contribution to the asserted damage, or to other mitigating factors. In addition, certain capital markets participants, including certain institutional investors and indices, have been divesting and promoting divestment of or screening out of fossil fuel equities, which could have a negative impact on our unit price and our access to and costs of capital. There is also the possibility that financial institutions may be pressured or required to adopt policies that limit funding for fossil fuel energy companies. For example, in January 2023 the Federal Reserve published instructions for its pilot climate scenario analysis exercise, which the six largest American banks are required to complete by July 31, 2023. Any material reduction in the capital available to the fossil fuel industry could make it more difficult

- 38 -

to secure funding for exploration, development, production, transportation, and processing activities, which could adversely impact our business and operations.

~~Furthermore, large~~Finally, increasing concentrations of greenhouse gases in the Earth’s atmosphere may produce climate changes that have significant physical effects, such as increased frequency and severity of storms, droughts, floods, rising sea levels and other climatic events, as well as chronic shifts in temperature and precipitation patterns. These climatic developments have the potential to cause physical damage to our assets or those of our customers or disrupt our supply chains and thus could have an adverse effect on our operations or demand for our services. Additionally, changing meteorological conditions, particularly temperature, may result in changes to the amount, timing, or location of demand for energy or its production.

Increasing attention to environmental, social and governance (“ESG”) matters may adversely impact our business, financial results, stock price or price of debt securities.

In recent years the investment community, including investment advisors, sovereign wealth funds, pension funds, universities, financial institutions, including institutional banks, lenders, and insurance companies, and other groups have ~~begun~~become more attentive to ~~announce their own~~ESG and sustainability related practices and have been lobbied intensively, and often publicly, by environmental activists concerned about climate change to limit or curtail activities with fossil fuel energy companies. There has also been an increase in third-party providers of company ESG ratings, and more ESG-focused voting policies among proxy advisory firms, portfolio managers, and institutional investors. As a result, some investors, funds, financial institutions and other capital markets participants may screen companies such as ours for ESG performance before investing in our common stock or debt securities, or lending to us or have imposed restrictions upon or otherwise limited lending to, investing in, or providing insurance coverage for, companies that operate in industries with higher perceived environmental exposure, such as the energy industry. If we are unable to meet ~~publicly announced~~the ESG standards or investment, lending, ratings, or voting criteria and policies set by these parties, we may lose investors, investors may allocate a portion of their capital away from us, we may become a target for ESG-focused activism, we may face increased costs of or limitations on access to capital or insurance necessary to sustain or grow our business, the price of our common stock or debt securities may be adversely impacted, demand for our services and refined petroleum products may be adversely impacted, and our reputation may be adversely affected, all of which could adversely impact our future financial results.

Members of the investment community are also increasing their focus on ESG practices and disclosures, including those related to climate ~~commitments, which often involve commitments to shift lending activities~~change, GHG emissions targets, business resilience under the assumptions of demand-constrained scenarios, and net-zero ambitions in the energy ~~sector to meet~~industry in particular, ~~GHG emissions goals.~~as well as diversity, equality, and inclusion initiatives, political activities, and governance standards among companies more generally. As a result, we may face increasing pressure or negative publicity regarding our ESG practices and disclosures and demands for ESG-focused engagement from investors, stakeholders, and other interested parties. This could result in higher costs, disruption and diversion of management attention, an increased strain on our resources, and the implementation of certain ~~institutional lenders~~ESG practices or disclosures that may ~~decide not to provide funding to us based on environmental concerns, which could adversely affect~~present a heightened level of legal and regulatory risk, or that threaten our ~~financial condition~~credibility with other investors and ~~access to capital for potential growth projects. These impacts could be intensified if United States’ financial regulators were to promulgate climate change requirements in the future.~~

stakeholders.

RISKS RELATED TO CYBERSECURITY, DATA SECURITY AND PRIVACY, INFORMATION TECHNOLOGY AND INTELLECTUAL PROPERTY

Our business is subject to information technology and cybersecurity risks to operational systems, security systems, infrastructure, and customer data processed by us, third-party vendors or suppliers, and any material failure, weakness, interruption, cyber event, including an incident or breach of security, could prevent us or third parties we rely on from effectively operating our business, harm our reputation or materially adversely affect our business, results of operations or financial condition.

Our business is dependent upon increasingly complex information technology systems and other digital technologies for controlling our plants and pipelines, processing transactions and summarizing and reporting results of operations. The secure collection, processing, maintenance, storage and transmission of information is critical to our operations. We are at risk for interruptions, outages and breaches of operational systems, including business, financial, accounting, data or processing, owned by us or our third-party vendors or suppliers; or third-party data that we process or our third-party partners process on our behalf. Such cyber incidents could materially disrupt or shut down operational systems; result in loss of, access to, or copying or transfer of intellectual property, trade secrets or other proprietary or competitively sensitive information; compromise certain information of customers, employees, suppliers, drivers or others; and jeopardize the security of our facilities. We monitor our information technology systems on a 24/7 basis in an effort to detect cyberattacks, security breaches or unauthorized access. Preventative and detective measures we utilize include independent cybersecurity audits and penetration tests. We implemented these efforts along with other risk mitigation procedures designed to detect and address unauthorized and damaging activity on our network, stay abreast of the increasing cybersecurity threat landscape and improve our cybersecurity posture, but such efforts will require updates and improvements and there is no guarantee that such measures will be adequate to detect, prevent or mitigate cyber incidents. Any implementation, maintenance, segregation and improvement of our systems may require significant management time, support and cost and may not be effective or adequate.

- 39 -

A cyber incident could be caused by disasters, insiders (through inadvertence or with malicious intent) or malicious third parties (including nation-states or nation-state supported actors) using sophisticated, targeted methods to circumvent firewalls, encryption and other security defenses, including hacking, fraud, trickery or other forms of deception that are generally beyond our control despite our implementation of protective measures. While there have been immaterial incidents of unauthorized access to our information technology systems, we have not experienced any material impact on our business or operations from these attacks. In addition, information technology system failures, communications network disruptions (whether intentional by a third party or due to natural disaster), and security breaches could still impact equipment and software used to control plants and pipelines, resulting in improper operation of our assets, potentially including delays in the delivery or availability of our customers’ products, contamination or degradation of the products we transport, store or distribute, or releases of hydrocarbon products and other damage to our facilities for which we could be held liable. These information technology system failures, communications network disruptions, and security breaches could also cause us to breach our contractual arrangements with other parties, or subject us to regulatory actions or litigation.

Furthermore, we collect and store sensitive data in the ordinary course of our business, including personally identifiable information of our employees as well as our proprietary business information and that of our customers, suppliers, investors and other stakeholders. We also work with third-party partners that may in the course of their business relationship with us collect, store, process and transmit sensitive data on our behalf and in connection with our products and services offerings. Despite our security measures, ours or our third-party partners' information technology systems may become the target of cyberattacks or security breaches (including employee error, malfeasance or other intentional or unintentional breaches), which are generally beyond our control, which could result in the theft or loss of the stored information, misappropriation of assets, disruption of transactions and reporting functions, our ability to protect confidential information and our financial reporting. Our efforts to improve security and protect data may result in increased capital and operating costs to modify, upgrade or enhance our security measures to protect against such cyber-attacks and we may face difficulties in fully anticipating or implementing adequate security measures or mitigating potential harm. Moreover, as technologies evolve and cyberattacks become increasingly sophisticated, we may not be able to anticipate, detect or prevent cyberattacks or security breaches, particularly because the methodologies used by attackers change frequently or may not be recognized until after such attack is launched, and because attackers are increasingly using technologies specifically designed to circumvent cybersecurity measures and avoid detection. Even with insurance coverage for cyberattacks, data breaches or unauthorized access of our or a third-party partner’s information technology systems, a claim could be denied or coverage delayed. Moreover, it is increasingly difficult to buy sufficient cyber insurance coverages as the insurance market has been limiting both liability under cyber policies and the issuance of said policies, generally. A cyberattack or security breach could result in liability under data privacy laws, regulatory penalties, damage to our reputation, or additional costs for remediation and modification or enhancement of our information systems to prevent future occurrences, all of which could have a material and adverse effect on our business, financial condition, results of operations or cash flows.

We may be subject to information technology system failures, communications network disruptions and data ~~breaches.~~breaches that are generally beyond our control.

We depend on the efficient and uninterrupted operation of third-party hardware and software systems and infrastructure, including our operating, communications and financial reporting systems. These systems are critical in meeting customer expectations, effectively tracking, maintaining and operating our equipment, directing and compensating our employees, and interfacing with our financial reporting system. We have implemented safeguards and other preventative measures designed to protect our systems and

~~- 39 -~~

data, ~~including sophisticated network security and internal control measures;~~ however, our information technology systems and communications network, and those of our information technology and communication service providers, remain vulnerable to interruption by natural disasters, power loss, telecommunications failure, terrorist attacks, vandalism, Internet failures, computer malware, ransomware, cyberattacks, data breaches and other events unforeseen or generally beyond our control. Additionally, the implementation of social distancing measures and other limitations on our employees, service providers and other third parties in response to the COVID-19 pandemic have necessitated in certain cases to switching to remote work arrangements on less secure systems and environments. The increase in companies and individuals working remotely has increased the risk of cyberattacks and potential cybersecurity incidents, both deliberate attacks and unintentional events. Any of these events could cause system interruptions, delays, and loss of critical data, and could prevent us from operating, which could make our business and services less attractive and subject us to liability. Any of these events could damage our reputation and be expensive to remedy.

In addition, information technology system failures, network disruptions (whether intentional by a third party or due to natural disaster), breaches of network or data security, or disruption or failure of the network system used to monitor and control pipeline and terminal operations could disrupt our operations by impeding our processing of transactions, our ability to protect customer or company information and our financial reporting. Although we have taken steps to address these concerns by implementing sophisticated network security and internal control measures, a system failure or data security breach could have a material adverse effect on our financial condition, results of operations or cash flows.

~~Cyberattacks or security breaches could have a material adverse effect on our business, financial condition, results of operations or cash flows.~~

Our business is dependent upon information technology systems and other digital technologies for controlling our plants and pipelines, processing transactions and summarizing and reporting results of operations. The secure processing, maintenance and transmission of information is critical to our operations. We monitor our information technology systems on a 24/7 basis in an effort to detect cyberattacks, security breaches or unauthorized access. Preventative and detective measures we utilize include independent cybersecurity audits and penetration tests. We implemented these efforts along with other risk mitigation procedures to detect and address unauthorized and damaging activity on our network, stay abreast of the increasing cybersecurity threat landscape and improve our cybersecurity posture. While there have been immaterial incidents of unauthorized access to our information technology systems, we have not experienced any impact on our business or operations from these attacks. In addition, information technology system failures, communications network disruptions (whether intentional by a third party or due to natural disaster), and security breaches could still impact equipment and software used to control plants and pipelines, resulting in improper operation of our assets, potentially including delays in the delivery or availability of our customers’ products, contamination or degradation of the products we transport, store or distribute, or releases of hydrocarbon products and other damage to our facilities for which we could be held liable.

Despite our security measures, our information technology systems may become the target of cyberattacks or security breaches (including employee error, malfeasance or other breaches), which could result in the theft or loss of the stored information, misappropriation of assets, disruption of transactions and reporting functions, our ability to protect confidential information and our financial reporting. Moreover, we may not be able to anticipate, detect or prevent cyberattacks or security breaches, particularly because the methodologies used by attackers change frequently or may not be recognized until such attack is launched, and because attackers are increasingly using technologies specifically designed to circumvent cybersecurity measures and avoid detection. Even with insurance coverage for cyberattacks, data breaches or unauthorized access of our information technology systems, a claim could be denied or coverage delayed. In addition, as technologies evolve, and cyberattacks become increasingly sophisticated, we may incur significant costs to modify, upgrade or enhance our security measures to protect against such cyberattacks and we may face difficulties in fully anticipating or implementing adequate security measures or mitigating potential harm. A cyberattack or security breach could result in liability under data privacy laws, regulatory penalties, damage to our reputation, or additional costs for remediation and modification or enhancement of our information systems to prevent future occurrences, all of which could have a material and adverse effect on our business, financial condition, results of operations or cash flows.

Our business is subject to complex and evolving laws, regulations and security standards regarding data privacy, cybersecurity and data protection (“data protection ~~laws”~~obligations”).Many of these data protection ~~laws~~obligations are subject to change and uncertain interpretation, any real or perceived failure to comply with such obligations and could result in

- 40 -

claims, changes to our business practices, monetary penalties, increased cost of operations or other harm to our business.

The constantly evolving regulatory and legislative environment surrounding data privacy and protection poses increasingly complex compliance challenges, and complying with such data protection ~~laws~~obligations could increase the costs and complexity of ~~compliance.~~compliance and enforcement risks. While we do not collect significant amounts of personal information from consumers, we do have personal information from our employees, job applicants and some business partners, such as contractors and distributors. Any failure, whether real or perceived, by us to comply with applicable data privacy and protection ~~laws~~obligations could result in proceedings or actions against us by governmental entities or others, subject us to significant fines, penalties, judgments, and negative publicity, require us to change our business practices, increase the costs and complexity of compliance, and adversely affect our business. Our compliance with emerging data privacy/security laws, as well as any associated inquiries or investigations or any other government actions related to these laws, may increase our operating ~~costs.~~

~~- 40 -~~

costs or subject us to legal and reputational risks, including significant awards, fines, civil or criminal penalties or judgments, proceedings or litigation by governmental agencies or customers, class action privacy litigation in certain jurisdictions and negative publicity.

In the second quarter of 2021, the Department of Homeland Security’s Transportation Security Administration (“TSA”) announced two new security directives. These directives require critical pipeline owners to comply with mandatory reporting measures, including, among other things, to appoint personnel, report confirmed and potential cybersecurity incidents to the DHS Cybersecurity and Infrastructure Security Agency (“CISA”) and provide vulnerability assessments. As legislation continues to develop and cyber incidents continue to evolve, we may be required to expend significant additional resources to respond to cyberattacks, to continue to modify or enhance our protective measures, or to detect, assess, investigate and remediate any critical infrastructure security vulnerabilities and report any cyber incidents to the applicable regulatory authorities. Any failure to ~~remain in~~maintain compliance with these evolving government regulations may ~~results~~result in enforcement actions which may then result in significant time, support and cost and have a material adverse effect on our business and operations.

RISKS RELATED TO LIQUIDITY, FINANCIAL INSTRUMENTS AND CREDIT

~~We may not be able to retain existing customers or acquire new customers.~~Increases in interest rates could adversely affect our business.

~~The renewal or replacement~~We use both fixed and variable rate debt, and we are exposed to market risk due to the floating interest rates on our credit facility. In addition, interest rates on future debt offerings could be higher, causing our financing costs to increase accordingly. Our results of ~~existing contracts with our customers at rates sufficient to maintain current revenues and~~operations, cash flows ~~depends on a number of factors outside our control, including competition from other pipelines~~ and ~~the demand for refined products~~financial position could be adversely affected by significant increases in the markets that we serve. Our long-term pipeline and terminal, tankage and refinery processing unit throughput agreements with HFC and a third party customer will expire beginning in 2022 through 2036. On September 30, 2019, Delek exercised its first renewal option (the “Renewal”) under this agreement for an additional five-year period beginning April 1, 2020, but only with respect to specific assets. For the refined product pipelines and refined product terminals that were not subject to the Renewal and which accounted for approximately $15 million to $16 million of our annual revenues from Delek as of December 31, 2019, the agreement terminated as of March 31, 2020. We reached a short-term agreement with Delek on a majority of the pipeline and terminal assets that were not part of the Renewal. We continue to explore avenues that will maximize value of the non-Renewal assets.interest rates.

Our leverage may limit our ability to borrow additional funds, comply with the terms of our indebtedness or capitalize on business opportunities.

As of December 31, ~~2021,~~2022, the principal amount of our total outstanding debt was ~~$1,340~~$1,556 million. On February 4, 2020, we closed a private placement of $500 million 5.0% senior notes due 2028 (the “5% Senior Notes”) and on April 8, 2022, we closed a private placement of $400 million 6.375% senior notes due 2027 (the "6.375% Senior Notes, " and together with the 5% Senior Notes, the "Senior Notes"). Various limitations in our Credit Agreement and the indenture for our 5% Senior Notes may reduce our ability to incur additional debt, to engage in some transactions and to capitalize on business opportunities. Any subsequent refinancing of our current indebtedness or any new indebtedness could have similar or greater restrictions.

Our leverage could have important consequences. We require substantial cash flow to meet our payment obligations with respect to our indebtedness. Our ability to make scheduled payments, to refinance our indebtedness or our ability to obtain additional financing in the future will depend on our financial and operating performance, which, in turn, is subject to then-current economic conditions and to financial, business, competitive, regulatory and other factors. We believe that we will have sufficient cash flow from operations and available borrowings under our Credit Agreement to service our indebtedness. However, a significant downturn in our business or other development adversely affecting our cash flow could materially impair our ability to service our indebtedness. We cannot guarantee that we would be able to refinance our existing indebtedness at maturity or otherwise or sell assets on terms that are commercially reasonable.

The instruments governing our debt contain restrictive covenants that may prevent us from engaging in certain transactions. The agreements governing our debt generally require us to comply with various affirmative and negative covenants including the maintenance of certain financial ratios and restrictions on incurring additional debt, entering into mergers, consolidations and sales of assets, making investments and granting liens. Our leverage may adversely affect our ability to fund future working capital, capital expenditures and other general partnership requirements, future acquisitions, construction or development activities, or to otherwise realize fully the value of our assets and opportunities because of the need to dedicate a substantial portion of our cash flow from operations to payments on our indebtedness or to comply with any restrictive terms of our indebtedness. Our leverage also may make our results of operations more susceptible to adverse economic and industry conditions by limiting our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate and may place us at a competitive disadvantage as compared to our competitors that have less debt.

- 41 -

We may not be able to obtain funding on acceptable terms or at all because of volatility and uncertainty in the credit and capital markets. This may hinder or prevent us from meeting our future capital needs.

The domestic and global financial markets and economic conditions are disrupted and volatile from time to time due to a variety of factors, including low consumer confidence, high unemployment, geoeconomic and geopolitical issues, including U.S. government shutdowns, weak economic conditions and uncertainty in the financial services sector. In addition, the fixed-income markets have experienced periods of extreme volatility, which negatively impacted market liquidity conditions. As a

~~- 41 -~~

result, the cost of raising money in the debt and equity capital markets has increased substantially at times while the availability of funds from these markets diminished significantly. In particular, as a result of concerns about the stability of financial markets generally and the solvency of lending counterparties specifically, the cost of obtaining money from the credit markets may increase as many lenders and institutional investors increase interest rates, enact tighter lending standards, refuse to refinance existing debt on similar terms or at all and reduce, or in some cases cease, to provide funding to borrowers. In addition, lending counterparties under existing revolving credit facilities and other debt instruments may be unwilling or unable to meet their funding obligations.

Due to these factors, we cannot be certain that new debt or equity financing will be available on acceptable terms. If funding is not available when needed, or is available only on unfavorable terms, we may be unable to:

•continue our business as currently structured and/or conducted;

•meet our obligations as they come due;

•execute our growth strategy;

•complete future acquisitions or construction projects;

•take advantage of other business opportunities; or

•respond to competitive pressures.

Any of the above could have a material adverse effect on our revenues and results of operations.

~~Increases in interest rates could adversely affect our business.~~

We use both fixed and variable rate debt, and we are exposed to market risk due to the floating interest rates on our credit facility. In addition, interest rates on future debt offerings could be higher, causing our financing costs to increase accordingly. Our results of operations, cash flows and financial position could be adversely affected by significant increases in interest rates.

~~The expected phase out of LIBOR could impact the interest rates paid on our variable rate indebtedness and could cause our interest expense to increase.~~

A portion of our borrowing capacity and outstanding indebtedness bears interest at a variable rate based on the London Interbank Offered Rate (“LIBOR”). The ICE Benchmark Administration Limited (“IBA”) announced that it will cease calculating and publishing all USD LIBOR tenors on June 30, 2023 and cease calculating and publishing certain USD LIBOR tenors on December 31, 2021. Further, U.K. and U.S. regulatory authorities recently issued statements encouraging banks to cease entering into new USD LIBOR based loans by no later than December 31, 2021 and to continue to transition away from USD LIBOR based loans in preparation of IBA ceasing to calculate and publish LIBOR based rates on June 30, 2023. These developments may cause fluctuations in LIBOR rates and pricing of USD LIBOR based loans that are not transitioned to a new benchmark rate.

The agreements that govern our variable rate indebtedness contain customary transition and fallback provisions in contemplation of the cessation of LIBOR. Nevertheless, at this time, it is not possible to predict the effect that these developments, any discontinuance, modification or other reforms to LIBOR or any other reference rate, or the establishment of alternative reference rates may have on LIBOR, other benchmarks or variable rate indebtedness. Uncertainty as to the nature of such potential discontinuance, modification, alternative reference rates or other reforms may materially adversely affect the trading market for securities linked to such benchmarks. Furthermore, the use of alternative reference rates or other reforms could cause the market value of, the applicable interest rate on and the amount of interest paid on our variable rate indebtedness to be materially different than expected and could cause our interest expense to increase.

If we are unable to generate sufficient cash flow, our ability to pay quarterly distributions to our common unitholders at current levels or to increase our quarterly distributions in the future could be impaired materially.

Our ability to pay quarterly distributions depends primarily on cash flow (including cash flow from operations, financial reserves and credit facilities) and not solely on profitability, which is affected by non-cash items. As a result, we may pay cash distributions during periods of losses and may be unable to pay cash distributions during periods of income. Our ability to generate sufficient cash from operations is largely dependent on our ability to manage our business successfully which may also be affected by economic, financial, competitive, regulatory, and other factors that are beyond our control. Because the cash we generate from operations will fluctuate from quarter to quarter, quarterly distributions may also fluctuate from quarter to quarter.

We are exposed to the credit risks and certain other risks, of our or our joint ventures' key customers, vendors, and other counterparties.

We are subject to risks of loss resulting from nonpayment or nonperformance by our or our joint ventures' customers, vendors or other counterparties. We and our joint ventures derive a significant portion of our revenues from contracts with key

~~- 42 -~~

customers, particularly ~~HFC,~~HF Sinclair, under its pipelines and terminals, tankage, tolling and throughput agreements. To the extent that our or our joint ventures' customers are unable to meet the specifications of their customers, we would be adversely affected unless we were able to make comparably profitable arrangements with other customers.

Mergers among our existing customers could provide strong economic incentives for the combined entities to use systems other than ours, and we could experience difficulty in replacing lost volumes and revenues. Because a significant portion of our operating costs are fixed, a reduction in volumes would result not only in a reduction of revenues, but also a decline in net income and cash flow of a similar magnitude, which would reduce our ability to meet our financial obligations and make distributions to unitholders.

If any of our or our joint ventures' key customers default on their obligations, our financial results could be adversely affected. Furthermore, some of our or our joint ventures' customers may be highly leveraged and subject to their own operating and regulatory risks. In addition, nonperformance by vendors who have committed to provide us with products or services could result in higher costs or interfere with our ability to successfully conduct our business.

Any substantial increase in the nonpayment and/or nonperformance by our or our joint ventures' customers or vendors could have a material adverse effect on our results of operations and cash flows.

- 42 -

In addition, in connection with the acquisition of certain of our assets, we have entered into agreements pursuant to which various counterparties, including ~~HFC,~~HF Sinclair, have agreed to indemnify us, subject to certain limitations, for:

•certain pre-closing environmental liabilities discovered within specified time periods after the date of the applicable acquisition;

•certain matters arising from the pre-closing ownership and operation of assets; and

•ongoing remediation related to the assets.

Our business, results of operation, cash flows and our ability to make cash distributions to our unitholders could be adversely affected in the future if third parties fail to satisfy an indemnification obligation owed to us.

Adverse changes in our and/or our general partner's credit ratings and risk profile may negatively affect us.

Our ability to access capital markets is important to our ability to operate our business. Regional and national economic conditions, increased scrutiny of the energy industry and regulatory changes, as well as changes in our economic performance, could result in credit agencies reexamining our credit rating.

We are in compliance with all covenants or other requirements set forth in our Credit Agreement. Further, we do not have any rating downgrade triggers that would automatically accelerate the maturity dates of any debt.

While credit ratings reflect the opinions of the credit agencies issuing such ratings and may not necessarily reflect actual performance, a downgrade in our credit rating could affect adversely our ability to borrow on, renew existing, or obtain access to new financing arrangements, could increase the cost of such financing arrangements, could reduce our level of capital expenditures and could impact our future earnings and cash flows.

The credit and business risk profiles of our general partner, and of ~~HFC~~HF Sinclair as the indirect owner of our general partner, may be factors in credit evaluations of us as a master limited partnership due to the significant influence of our general partner and its indirect ownership over our business activities, including our cash distribution policy, acquisition strategy and business risk profile. Another factor that may be considered is the financial condition of our general partner and its owners, including the degree of their financial leverage and their dependence on cash flow from the partnership to service their indebtedness.

RISKS TO COMMON UNITHOLDERS

~~HFC~~HF Sinclair and its affiliates may have conflicts of interest and limited fiduciary duties, which may permit them to favor their own interests.

Currently, ~~HFC~~HF Sinclair and certain of its subsidiaries collectively own a ~~57%~~47% limited partner interest and a non-economic general partner interest in us and controls HLS, the general partner of our general partner, HEP Logistics. Conflicts of interest may arise between ~~HFC~~HF Sinclair and its affiliates, including our general partner, on the one hand, and us, on the other hand. As a result of these conflicts, the general partner may favor its own interests and the interests of its other affiliates over our interests. These conflicts include, among others, the following situations:

~~- 43 -~~

•~~HFC,~~HF Sinclair, as a shipper on our pipelines, has an economic incentive not to cause us to seek higher tariff rates or terminalling fees, even if such higher rates or terminalling fees would reflect rates that could be obtained in arm's -length, third-party transactions;

•~~HFC's~~HF Sinclair's directors and officers have a fiduciary duty to make business decisions in the best interests of the stockholders of ~~HFC;~~HF Sinclair;

•our general partner is allowed to take into account the interests of parties other than us, such as ~~HFC,~~HF Sinclair, in resolving conflicts of interest;

•our partnership agreement provides for modified or reduced fiduciary duties for our general partner, and also restricts the remedies available to our unitholders for actions that, without the limitations, might constitute breaches of fiduciary duty;

•our general partner determines which costs incurred by ~~HFC~~HF Sinclair and its affiliates are reimbursable by us;

•our partnership agreement does not restrict our general partner from causing us to pay it or its affiliates for any services rendered to us or entering into additional contractual arrangements with any of these entities on our behalf;

•our general partner may, in some circumstances, cause us to borrow funds to make cash distributions, even where the purpose or effect of the borrowing benefits our general partner or affiliates;

•our general partner determines the amount and timing of our asset purchases and sales, capital expenditures and borrowings, each of which can affect the amount of cash available to us; and

•our general partner controls the enforcement of obligations owed to us by our general partner and its affiliates, including the pipelines and terminals agreement with ~~HFC.~~HF Sinclair.

- 43 -

Cost reimbursements, which will be determined by our general partner, and fees due to our general partner and its affiliates for services provided, are substantial.

Under our Omnibus Agreement, we are obligated to pay ~~HFC~~HF Sinclair an administrative fee of currently ~~$2.6~~$5.0 million per year for the provision by ~~HFC~~HF Sinclair or its affiliates of various general and administrative services for our benefit. The administrative fee is subject to an annual upward adjustment for changes in PPI. In addition, we are required to reimburse ~~HFC~~HF Sinclair pursuant to the secondment arrangement for the wages, benefits, and other costs of ~~HFC~~HF Sinclair employees seconded to HLS to perform services at certain of our processing, refining, pipeline and tankage assets. We can neither provide assurance that ~~HFC~~HF Sinclair will continue to provide us the officers and employees that are necessary for the conduct of our business nor that such provision will be on terms that are acceptable to us. If ~~HFC~~HF Sinclair fails to provide us with adequate personnel, our operations could be adversely impacted.

The administrative fee and secondment allocations are subject to annual review and may increase if we make an acquisition that requires an increase in the level of general and administrative services that we receive from ~~HFC~~HF Sinclair or its affiliates. For example, in connection with the HEP Transaction, we paid HF Sinclair a temporary monthly fee of $62,500 through November 30, 2022 relating to transition services provided to us by HF Sinclair. Our general partner will determine the amount of general and administrative expenses that will be allocated to us in accordance with the terms of our partnership agreement. In addition, our general partner and its affiliates are entitled to reimbursement for all other expenses they incur on our behalf, including the salaries of and the cost of employee benefits for employees of HLS who provide services to us.

Prior to making any distribution on the common units, we will reimburse our general partner and its affiliates, including officers and directors of the general partner, for all expenses incurred on our behalf, plus the administrative fee. The reimbursement of expenses and the payment of fees could adversely affect our ability to make distributions. The general partner has sole discretion to determine the amount of these expenses. Our general partner and its affiliates also may provide us other services for which we are charged fees as determined by our general partner.

Increases in interest rates could adversely impact our unit price and our ability to issue additional equity to make acquisitions, fund expansion capital expenditures, or for other purposes.

As with other yield-oriented securities, our unit price is impacted by the level of our cash distributions and implied distribution yield. The distribution yield is often used by investors to compare and rank related yield-oriented securities for investment decision-making purposes. Therefore, changes in interest rates, either positive or negative, may affect the yield requirements of investors who invest in our units and a rising interest rate environment could have an adverse impact on our unit price and our ability to issue additional equity to make acquisitions, fund expansion capital expenditures or for other purposes. If we then issue additional equity at a significantly lower price, material dilution to our existing unitholders could result.

Even if unitholders are dissatisfied, they cannot remove our general partner without its consent.

Unlike the holders of common stock in a corporation, unitholders have only limited voting rights on matters affecting our business and, therefore, limited ability to influence management's decisions regarding our business. Unitholders did not elect our general partner or the board of directors of HLS and have no right to do so on an annual or other continuing basis. The board of directors of HLS is chosen by the sole member of HLS. If unitholders are dissatisfied with the performance of our

~~- 44 -~~

general partner, they will have little ability to remove our general partner. As a result of these limitations, the price at which the common units trade could be diminished because of the absence or reduction of a takeover premium in the trading price.

The vote of the holders of at least 66 2/3% of all outstanding units voting together as a single class is required to remove the general partner. Unitholders will be unable to remove the general partner without its consent because the general partner and its affiliates own sufficient units to prevent its removal. Unitholders' voting rights are further restricted by the partnership agreement provision providing that any units held by a person that owns 20% or more of any class of units then outstanding (other than the general partner, its affiliates, their transferees, and persons who acquired such units with the prior approval of the board of directors of the general partner's general partner) cannot vote on any matter; however, no such person currently exists. Our partnership agreement also contains provisions limiting the ability of unitholders to call meetings, acquire information about our operations, and influence the manner or direction of management.

The control of our general partner may be transferred to a third party without unitholder consent.

Our general partner may transfer its general partner interest to a third party in a merger or in a sale of all or substantially all of its assets without the consent of the unitholders. Furthermore, our partnership agreement does not restrict the ability of the partners of our general partner from transferring their respective partnership interests in our general partner to a third party. The new partners of our general partner would then be in a position to replace the board of directors and officers of the general partner of our general partner with their own choices and to control the decisions made by the board of directors and officers.

- 44 -

We may issue additional limited partner units without unitholder approval, which would dilute an existing unitholder's ownership interests.

Under our partnership agreement, provided there is no significant decrease in our operating performance, we may issue an unlimited number of limited partner interests of any type without the approval of our unitholders, and HEP currently has a shelf registration on file with the SEC pursuant to which it may issue up to $2.0 billion in additional common units. On May 10, 2016, HEP established a continuous offering program under the shelf registration statement pursuant to which HEP may issue and sell common units from time to time, representing limited partner interests, up to an aggregate gross sales amount of $200 million. As of December 31, ~~2021,~~2022, HEP has issued 2.4 million units under this program for gross consideration of $82.3 million. No units were issued under the program during the year ended December 31, 2022.

The issuance by us of additional common units or other equity securities of equal or senior rank will have the following effects:

•our unitholders' proportionate ownership interest in us will decrease;

•the amount of cash available for distribution on each unit may decrease;

•the relative voting strength of each previously outstanding unit may be diminished; and

•the market price of the common units may decline.

Our partnership agreement does not give our unitholders the right to approve our issuance of equity securities ranking junior to the common units at any time.

In establishing cash reserves, our general partner may reduce the amount of cash available for distribution to unitholders.

Our partnership agreement requires us to distribute all available cash to our unitholders; however, it also requires our general partner to deduct from operating surplus cash reserves that it establishes are necessary to fund our future operating expenditures. In addition, our partnership agreement permits our general partner to reduce available cash by establishing cash reserves for the proper conduct of our business, to comply with applicable law or agreements to which we are a party, or to provide funds for future distributions to partners. These cash reserves will affect the amount of cash available to make the required payments to our debt holders or distributions on our common units every quarter.

~~HFC~~HF Sinclair and its affiliates may engage in limited competition with us.

~~HFC~~HF Sinclair and its affiliates may engage in limited competition with us. Pursuant to the Omnibus Agreement, ~~HFC~~HF Sinclair and its affiliates agreed not to engage in the business of operating intermediate or refined product pipelines or terminals, crude oil pipelines or terminals, truck racks or crude oil gathering systems in the continental United States. The Omnibus Agreement, however, does not apply to:

•any business operated by ~~HFC~~HF Sinclair or any of its subsidiaries at the closing of our initial public offering;

•any business or asset that ~~HFC~~HF Sinclair or any of its subsidiaries acquires or constructs that has a fair market value or construction cost of less than $5 million; and

~~- 45 -~~

•any business or asset that ~~HFC~~HF Sinclair or any of its subsidiaries acquires or constructs that has a fair market value or construction cost of $5 million or more if we have been offered the opportunity to purchase the business or asset at fair market value, and we decline to do so.

In the event that ~~HFC~~HF Sinclair or its affiliates no longer control our partnership or there is a change of control of ~~HFC,~~HF Sinclair, the non-competition provisions of the Omnibus Agreement will terminate.

Our general partner has a limited call right that may require a unitholder to sell its common units at an undesirable time or price.

If at any time our general partner and its affiliates own more than 80% of the common units (which it does not presently), our general partner will have the right (which it may assign to any of its affiliates or to us) but not the obligation to acquire all, but not less than all, of the common units held by unaffiliated persons at a price not less than their then-current market price. As a result, a holder of common units may be required to sell its units at a time or price that is undesirable to it and may not receive any return on its investment. A common unitholder may also incur a tax liability upon a sale of its units.

- 45 -

A unitholder may not have limited liability if a court finds that unitholder actions constitute control of our business or that we have not complied with state partnership law.

Under Delaware law, a unitholder could be held liable for our obligations to the same extent as a general partner if a court determined that the right of unitholders to remove our general partner or to take other action under our partnership agreement constituted participation in the “control” of our business. Our general partner generally has unlimited liability for our obligations, such as our debts and environmental liabilities, except for those contractual obligations that are expressly made without recourse to our general partner.

In addition, Section 17-607 and 17-804 of the Delaware Revised Uniform Limited Partnership Act provides that under some circumstances, a unitholder may be liable to us for the amount of a distribution for a period of three years from the date of the distribution.

Further, we conduct business in a number of states. In some of those states the limitations on the liability of limited partners for the obligations of a limited partnership have not been clearly established. The unitholders might be held liable for the partnership's obligations as if they were a general partner if a court or government agency determined that we were conducting business in the state but had not complied with the state's partnership statute.

~~HFC~~HF Sinclair and our other significant unitholders may sell our common units in the public or private markets, and such sales could have an adverse impact on the trading price of ~~the~~our common units. Additionally, ~~HFC~~HF Sinclair may pledge or hypothecate its common units or its interest in us.

~~HFC currently holds~~As of February 15, 2023, HF Sinclair held 59,630,030 of our common units and REH Company, our next largest unitholder, held 21,000,000 of our common units, which is approximately ~~57%~~47% and 16.6% of our outstanding common ~~units.~~units, respectively. The sale of these common units (or the perception that these sales may occur) in the public or private markets by HF Sinclair or REH Company could have an adverse impact on the trading price of our common units. Additionally, we agreed to provide ~~HFC~~both HF Sinclair and REH Company registration rights with respect to our common units that ~~it holds. HFC~~they hold. HF Sinclair may pledge or hypothecate its common units, and such pledge or hypothecation may include terms and conditions that might result in an adverse impact on the trading price of our common units.

TAX RISKS TO COMMON UNITHOLDERS

Our tax treatment depends on our status as a partnership for U.S. federal income tax purposes and not being subject to a material amount of entity-level taxation by individual states. If the IRS were to treat us as a corporation for U.S. federal income tax purposes or if we were to become subject to additional amounts of entity-level taxation for federal or state tax purposes, our cash available for distribution to our unitholders could be substantially reduced.

The anticipated after-tax economic benefit of an investment in our common units depends largely on our being treated as a partnership for U.S. federal income tax purposes.

Despite the fact that we are organized as a limited partnership under Delaware law, we would be treated as a corporation for U.S. federal income tax purposes unless we satisfy a “qualifying income” requirement. Based upon our current operations and current Treasury Regulations, we believe we satisfy the qualifying income requirement. Failing to meet the qualifying income requirement or a change in current law could cause us to be treated as a corporation for U.S. federal income tax purposes or otherwise subject us to taxation as an entity.

If we were treated as a corporation for U.S. federal income tax purposes, we would pay U.S. federal income tax on our taxable income at the corporate tax rate. Distributions to unitholders would generally be taxed again as corporate distributions, and no

~~- 46 -~~

income, gains, losses or deductions would flow through to unitholders. Because a tax would be imposed upon us as a corporation, our cash available for distribution to unitholders ~~could~~would be substantially reduced. Therefore, our treatment as a corporation ~~could~~would result in a material reduction in the anticipated cash flow and after-tax return to unitholders, likely causing a substantial reduction in the value of our common units.

At the entity level, if we were subject to U.S. federal income tax, we would also be subject to the income tax provisions of many states. Moreover, states are evaluating ways to independently subject partnerships to entity-level taxation through the imposition of state income taxes, franchise taxes and other forms of taxation. For example, we are required to pay Texas margin tax on any income apportioned to Texas, despite our status as a partnership. Imposition of any additional such taxes or an increase in the existing tax rates could reduce the cash available for distributions to our unitholders. Our partnership agreement provides that if a law is enacted or existing law is modified or interpreted in a manner that subjects us to taxation as a corporation or otherwise subjects us to entity-level taxation for federal, state or local income tax purposes, the minimum quarterly distribution amount and the target distribution amounts may be adjusted to reflect the impact of that law on us.

- 46 -

The tax treatment of publicly traded partnerships or an investment in our common units could be subject to potential legislative, judicial or administrative changes or differing interpretations, possibly applied on a retroactive basis.

The present U.S. federal income tax treatment of publicly traded partnerships or an investment in our common units may be modified by administrative, legislative or judicial changes and differing interpretations at any time. Members of Congress have frequently proposed and considered similar substantive changes to the existing U.S. federal income tax laws that would affect publicly traded partnerships, including proposals that would eliminate our ability to qualify for partnership tax treatment.

In addition, the Treasury Department has issued, and in the future may issue, regulations interpreting those laws that affect publicly traded partnerships. There can be no assurance that there will not be further changes to U.S. federal income tax laws or the Treasury Department’s interpretation of the qualifying income rules in a manner that could impact our ability to qualify as a partnership in the future, which could also negatively impact the value of an investment in our common units. Any modification to the U.S. federal income tax laws and interpretations thereof may be applied retroactively and could make it more difficult or impossible for us to meet the qualifying income requirement to be treated as a partnership for U.S. federal income tax purposes. We are unable to predict whether any changes or proposals will ultimately be enacted. You are urged to consult with your own tax advisor with respect to the status of legislative, regulatory or administrative developments and proposals and their potential effect on your investment in our common units.

If the IRS contests the U.S. federal income tax positions we take, the market for our common units may be adversely impacted, and the cost of any IRS contest will reduce our cash available for distribution to our unitholders.

The IRS may adopt positions that differ from the positions we have taken or may take on tax matters. It may be necessary to resort to administrative or court proceedings to sustain some or all of the positions we take, and a court may not agree with some or all of the positions we take. Any contest with the IRS may materially and adversely impact the market for our common units and the price at which they trade. In addition, the costs of any contest with the IRS would be borne indirectly by our unitholders and general partner because the costs will reduce our cash available for distribution.

If the IRS makes audit adjustments to our income tax returns for tax years beginning after December 31, 2017, it (and some states) may assess and collect any taxes (including any applicable penalties and interest) resulting from such audit adjustment directly from us, in which case our cash available for distribution to our unitholders might be substantially reduced, and our current and former unitholders may be required to indemnify us for any taxes (including any applicable penalties and interest) resulting from such audit adjustments that were paid on their behalf.

Pursuant to the Bipartisan Budget Act of 2015, for tax years beginning after December 31, 2017, if the IRS makes audit adjustments to our income tax returns, it (and some states) may assess and collect any taxes (including any applicable penalties and interest) resulting from such audit adjustment directly from us. Under our partnership agreement, our general partner is permitted to make elections under these rules to either pay the taxes (including any applicable penalties and interest) directly to the IRS or, if we are eligible, issue a revised information statement to each affected current and former unitholder with respect to an audited and adjusted return. Although our general partner may elect to have our affected current and former unitholders take such audit adjustment into account and pay any resulting taxes (including any applicable penalties and interest) in accordance with their interests in us during the tax year under audit, there can be no assurance that such election will be practical, permissible or effective in all circumstances. As a result, our current unitholders may bear some or all of the tax liability resulting from such audit adjustment, even if such unitholders did not own units in us during the tax year under audit. If, as a result of any such audit adjustment, we are required to make payments of taxes, penalties or interest, our cash available for distribution to our unitholders might be substantially reduced, and our current and former unitholders may be required to indemnify us for any taxes (including any applicable penalties and interest) resulting from such audit adjustments that were paid on their behalf. These rules are not applicable for tax years beginning on or prior to December 31, 2017.

~~- 47 -~~

Even if unitholders do not receive any cash distributions from us, they will be required to pay taxes on their share of our taxable income.

Unitholders will be required to pay U.S. federal income taxes and, in some cases, state and local income taxes, on their share of our taxable income, whether or not they receive cash distributions from us. For example, if we sell assets and use the proceeds to repay existing debt or fund capital expenditures, unitholders may be allocated taxable income and gain resulting from the sale and our cash available for distribution would not increase. Similarly, taking advantage of opportunities to reduce our existing debt, such as debt exchanges, debt repurchases, or modifications of our existing debt, could result in “cancellation of indebtedness income” being allocated to unitholders as taxable income without any increase in our cash available for distribution. Unitholders may not receive cash distributions from us equal to their share of our taxable income or even equal to the actual tax due from the unitholder with respect to that income.

- 47 -

Tax gain or loss on the disposition of our common units could be more or less than expected.

If a unitholder disposes of common units, it will recognize gain or loss equal to the difference between the amount realized and its tax basis in those common units. Because distributions in excess of a unitholder's allocable share of our net taxable income result in a decrease of the unitholder's tax basis in its common units, the amount, if any, of such prior excess distributions with respect to the units sold will, in effect, become taxable income to the unitholder if it sells such units at a price greater than its tax basis in those units, even if the price the unitholder receives is less than its original cost. In addition, because the amount realized includes a unitholder's share of our nonrecourse liabilities, if unitholders sell their units, they may incur a tax liability in excess of the amount of cash they receive from the sale.

A substantial portion of the amount realized from the sale of a unitholder's common units, whether or not representing gain, may be taxed as ordinary income to the unitholder due to potential recapture items, including depreciation recapture. Thus, the unitholder may recognize both ordinary income and capital loss from the sale of such units if the amount realized on a sale of such units is less than the unitholder's adjusted basis in the units. Net capital loss may only offset capital gains and, in the case of individuals, up to $3,000 of ordinary income per year. In the taxable period in which the unitholder sells its units, the unitholder may recognize ordinary income from our allocations of income and gain to the unitholder prior to the sale and from recapture items that generally cannot be offset by any capital loss recognized upon the sale of units.

Unitholders may be subject to limitation on their ability to deduct interest expense incurred by us.

We are generally entitled to a deduction for interest paid or accrued on indebtedness properly allocable to our trade or business during our taxable year. However, ~~under the Tax Cuts and Jobs Act, for taxable years beginning after December 31, 2017,~~ our deduction for “business interest” is limited to the sum of our business interest income and 30% of our “adjusted taxable income.” For the purposes of this limitation, our adjusted taxable income is computed without regard to any business interest expense or business interest income, and in the case of taxable years beginning before January 1, 2022, any deduction allowable for depreciation, amortization, or depletion to the extent such depreciation, amortization, or depletion is not capitalized into cost of goods sold with respect to inventory.income.

If our business interest is subject to limitation under these rules, it could result in an increase in the taxable income allocable to a unitholder for such taxable year without any corresponding increase in the cash available for distribution to such unitholder.

Tax-exempt entities face unique tax issues from owning our common units that may result in adverse tax consequences to them.

Investment in our common units by tax-exempt entities, such as employee benefit plans and individual retirement accounts (known as IRAs) raises issues unique to them. For example, virtually all of our income allocated to organizations that are exempt from U.S. federal income tax, including IRAs and other retirement plans, will be unrelated business taxable income and will be taxable to them. Tax-exempt entities should consult a tax advisor before investing in our common units.

Non-U.S. unitholders will be subject to U.S. taxes and withholding with respect to their income and gain from owning our units.

Non-U.S. unitholders are generally taxed and subject to U.S. income tax filing requirements on income effectively connected with a U.S. trade or business (“effectively connected income”). Income allocated to our unitholders and any gain from the sale of our units will generally be considered to be effectively connected with a U.S. trade or business. As a result, distributions to a non-U.S. unitholder will be subject to withholding at the highest applicable effective tax rate, and a non-U.S. unitholder who sells or otherwise disposes of a unit will also be subject to U.S. federal income tax on the gain realized from the sale or disposition of that unit. In addition to the withholding tax imposed on distributions of effectively connected income, distributions to a non-U.S. unitholder will also be subject to a 10% withholding tax on the amount of any distribution in excess of our cumulative net income. As we do not compute our cumulative net income for such purposes due to the complexity of the calculation and lack of clarity in how it would apply to us, we intend to treat all of our distributions as being in excess of our cumulative net income for such purposes and subject to such 10% withholding tax. Accordingly, distributions to a non-U.S. unitholder will be subject to a combined withholding tax rate equal to the sum of the highest applicable effective tax rate and 10%.

~~- 48 -~~

Moreover, the transferee of an interest in a partnership that is engaged in a U.S. trade or business is generally required to withhold 10% of the “amount realized” by the transferor unless the transferor certifies that it is not a foreign person. While the determination of a partner’s amount realized generally includes any decrease of a partner’s share of the partnership’s liabilities, the Treasury Regulations provide that the amount realized on a transfer of an interest in a publicly traded partnership, such as our common units, will generally be the amount of gross proceeds paid to the broker effecting the applicable transfer on behalf of the transferor, and thus will be determined without regard to any decrease in that partner’s share of a publicly traded partnership’s liabilities. The Treasury Regulations further provide that withholding on a transfer of an interest in a publicly traded partnership will not be imposed on a transfer that occurs prior to January 1, 2022, and administrative guidance from the IRS further provides that such withholding obligation has been deferred until January 1, 2023. For a transfer of interests in a publicly traded partnership that is effected through a broker on or after January 1, 2023, the obligation to withhold is imposed on the transferor’s broker. ~~Prospective~~Current and prospective foreign unitholders should consult their tax advisors regarding the impact of these rules on an investment in our common units.

- 48 -

We treat each purchaser of common units as having the same tax benefits without regard to the actual common units purchased. The IRS may challenge this treatment, which could adversely affect the value of the common units.

Because we cannot match transferors and transferees of common units, we have adopted depreciation and amortization positions that may not conform to all aspects of existing Treasury Regulations. A successful IRS challenge to those positions could adversely affect the amount of tax benefits available to our unitholders. It also could affect the timing of these tax benefits or the amount of gain from unitholders' sale of common units and could have a negative impact on the value of our common units or result in audit adjustments.

We generally prorate our items of income, gain, loss and deduction between transferors and transferees of our units each month based upon the ownership of our units on the first day of each month, instead of on the basis of the date a particular unit is transferred. The IRS may challenge this treatment, which could change the allocation of items of income, gain, loss and deduction among our unitholders.

We generally prorate our items of income, gain, loss and deduction between transferors and transferees of our units each month based upon the ownership of our units on the first day of each month (the “Allocation Date”) instead of on the date a particular unit is transferred. Similarly, we generally allocate certain deductions for depreciation of capital additions, gain or loss realized on a sale or other disposition of our assets and, in the discretion of the general partner, any other extraordinary item of income, gain, loss or deduction based upon ownership on the Allocation Date. Treasury Regulations allow a similar monthly simplifying convention, but such regulations do not specifically authorize all aspects of our proration method. If the IRS were to challenge our proration method, we may be required to change the allocation of items of income, gain, loss and deduction among our unitholders.

A unitholder whose units are the subject of a securities loan (e.g., a loan to a “short seller” to cover a short sale of units) may be considered as having disposed of those units. If so, it would no longer be treated for tax purposes as a partner with respect to those units during the period of the loan and may recognize gain or loss from the disposition.

Because there are no specific rules governing the U.S. federal income tax consequences of loaning a partnership interest, a unitholder whose units are the subject of a securities loan may be considered as having disposed of the loaned units. In that case, such unitholder may no longer be treated for tax purposes as a partner with respect to those units during the period of the loan to the short seller and the unitholder may recognize gain or loss from such disposition. Moreover, during the period of the loan, any of our income, gain, loss or deduction with respect to those units may not be reportable by the unitholder and any cash distributions received by the unitholder as to those units could be fully taxable as ordinary income. Unitholders desiring to assure their status as partners and avoid the risk of gain recognition from a securities loan are urged to modify any applicable brokerage account agreements to prohibit their brokers from borrowing their units.

We have adopted certain valuation methodologies in determining a unitholder's allocations of income, gain, loss and deduction. The IRS may challenge these methodologies or the resulting allocations, which could adversely affect the value of our common units.

In determining the items of income, gain, loss and deduction allocable to our unitholders, we must routinely determine the fair market value of our assets. Although we may, from time to time, consult with professional appraisers regarding valuation matters, we make many fair market value estimates using a methodology based on the market value of our common units as a means to measure the fair market value of our assets. The IRS may challenge these valuation methods and the resulting allocations of income, gain, loss and deduction.

A successful IRS challenge to these methods or allocations could adversely affect the amount of taxable income or loss being allocated to our unitholders. It also could affect the amount of gain recognized from our unitholders' sale of common units and

~~- 49 -~~

~~could have a negative impact on the value of the common units or result in audit adjustments to our unitholders' tax returns without the benefit of additional deductions.~~

Unitholders likely will be subject to state and local taxes and return filing requirements in jurisdictions where they do not live as a result of investing in our common units.

In addition to U.S. federal income tax, unitholders likely will be subject to other taxes, such as state and local income taxes, unincorporated business taxes and estate, inheritance, or intangible taxes that are imposed by the various jurisdictions in which we do business or own property now or in the future. Unitholders likely will be required to file state and local income tax returns and pay state and local income taxes in some or all of these various jurisdictions, even if they do not live in these jurisdictions. Further, unitholders may be subject to penalties for failure to comply with those requirements. We currently own property and conduct business in ~~Texas, New Mexico, Utah, Idaho, Oklahoma, Washington, Kansas, Wyoming and Nevada. We~~multiple states. Many of these states currently impose a personal income tax on individuals. As we make acquisitions or expand our business, we may ~~also~~ own ~~property~~assets or conduct business in ~~other~~additional states ~~or foreign countries in~~that impose a personal income tax. Unitholders should consult with their own tax advisors regarding the ~~future, including following~~filing of such tax returns, the ~~closing~~payment of such taxes, and the ~~HEP Transaction. It is the unitholder's responsibility to file all federal, state, local and foreign tax returns.~~

deductibility of any taxes paid.

Item 1B.Unresolved Staff Comments

We do not have any unresolved SEC staff comments.

Item 3.Legal Proceedings

In the ordinary course of business, we may become party to legal, regulatory or administrative proceedings or governmental investigations, including environmental and other matters. Damages or penalties may be sought from us in some matters and certain matters may require years to resolve. While the outcome and impact of these proceedings and investigations on us cannot be predicted with certainty, based on advice of counsel, management believes that the resolution of these proceedings

- 49 -

and investigations, through settlement or adverse judgment, will not, either individually or in the aggregate, have a material adverse effect on our financial condition, results of operations or cash flows.

Item 4.Mine Safety Disclosures

Not applicable.

- 50 -

PART II

Item 5.Market for the Registrant’s Common Units, Related Unitholder Matters and Issuer Purchases of Common Units

Our common limited partner units are traded on the New York Stock Exchange under the symbol “HEP.”

As of February 15, ~~2022,~~2023, we had approximately ~~17,216~~16,748 common unitholders, including beneficial owners of common units held in street name.

We consider regular cash distributions to unitholders on a quarterly basis, although there is no assurance as to future cash distributions since they are dependent upon future earnings, cash flows, capital requirements, financial condition and other factors. See “Liquidity and Capital Resources” under Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” for a discussion of conditions and limitations prohibiting distributions under the Credit Agreement and indentures relating to our senior notes.

Common Unit Repurchases Made in the Quarter

The following table discloses purchases of our common units made by us or on our behalf for the periods shown below:

Period Total Number of
Units Purchased Average Price
Paid Per Unit Total Number of
Units Purchased as
Part of Publicly
Announced Plan or
Program Maximum Number
of Units that May
Yet be Purchased
Under a Publicly
Announced Plan or
Program
October 2021 — $ — — $ —
November 2021 113,729 $ 17.21 — $ —
December 2021 31,734 $ 16.42 — $ —
Total for October to December 2021 145,463 —


Period	Total Number of Units Purchased	Average Price Paid Per Unit		Total Number of Units Purchased as Part of Publicly Announced Plan or Program	Maximum Number of Units that May Yet be Purchased Under a Publicly Announced Plan or Program
October 2022	—	$	—	—	$	—
November 2022	72,831	$	19.12	—	$	—
December 2022	22,409	$	18.71	—	$	—
Total for October to December 2022	95,240			—

The units reported represent (a) purchases of ~~113,729~~72,831 common units in the open market for delivery to the recipients of our phantom unit and performance unit awards under our Long-Term Incentive Plan at the time of grant or settlement, as applicable; and (b) the delivery of ~~31,734~~22,409 common units (which units were previously issued to certain officers and other employees pursuant to phantom unit awards at the time of grant or settlement, as applicable) by such officers and employees to provide funds for the payment of payroll and income taxes due at vesting in the case of officers and employees who did not elect to satisfy such taxes by other means.

Item 6. [Reserved]

- 51 -

Item 7.Management’s Discussion and Analysis of Financial Condition and Results of Operations

This Item 7, including but not limited to the sections under “Results of Operations” and “Liquidity and Capital Resources,” contains forward-looking statements. See “Forward-Looking Statements” at the beginning of Part I and Item 1A. “Risk Factors.” In this document, the words “we,” “our,” “ours” and “us” refer to Holly Energy Partners, L.P. (“HEP”) and its consolidated subsidiaries or to HEP or an individual subsidiary and not to any other person.

References herein to HEP with respect to time periods prior to March 14, 2022, include HEP and its consolidated subsidiaries and do not include Sinclair Transportation Company LLC (“Sinclair Transportation”) and its consolidated subsidiaries (collectively, the “HEP Acquired Sinclair Businesses”). References herein to HEP with respect to time periods from and after March 14, 2022 include the operations of the HEP Acquired Sinclair Businesses.

References herein to HF Sinclair Corporation (“HF Sinclair”) with respect to time periods prior to March 14, 2022 refer to HollyFrontier Corporation (“HFC”) and its consolidated subsidiaries and do not include Hippo Holding LLC (now known as Sinclair Holding LLC), Sinclair Transportation or their respective consolidated subsidiaries (collectively, the “HFS Acquired Sinclair Businesses”). References herein to HF Sinclair with respect to time periods from and after March 14, 2022 refer to HF Sinclair and its consolidated subsidiaries, which include the operations of the combined business operations of HFC and the HFS Acquired Sinclair Businesses.

OVERVIEW

HEP, together with its consolidated subsidiaries, is a ~~Delaware~~publicly held master limited partnership. On March 14, 2022 (the “Closing Date”), HFC and HEP announced the establishment of HF Sinclair, as the new parent holding company of HFC and HEP and their subsidiaries, and the completion of their respective acquisitions of Sinclair Oil Corporation (now known as Sinclair Oil LLC ("Sinclair Oil")) and Sinclair Transportation from REH Company (formerly known as The Sinclair Companies, and referred to herein as “REH Company”). On the Closing Date, HF Sinclair completed its acquisition of Sinclair Oil by effecting (a) a holding company merger with HFC surviving such merger as a direct wholly owned subsidiary of HF Sinclair (the “HFC Merger”), and (b) immediately following the HFC Merger, a contribution whereby REH Company contributed all of the equity interests of Hippo Holding LLC (now known as Sinclair Holding LLC), the parent company of Sinclair Oil (the “Target Company”), to HF Sinclair in exchange for shares of HF Sinclair, resulting in the Target Company becoming a direct wholly owned subsidiary of HF Sinclair (together with the HFC Merger, the “HFC Transactions”).

As of December 31, 2022, HF Sinclair and its subsidiaries owned a 47% limited partner interest and the non-economic general partner interest in HEP.

Additionally, on the Closing Date and immediately prior to consummation of the HFC Transactions, HEP acquired all of the outstanding equity interests of Sinclair Transportation from REH Company in exchange for 21 million newly issued common limited partner units of HEP (the “HEP Units”), representing 16.6% of the pro forma outstanding HEP Units with a value of approximately $349 million based on HEP’s fully diluted common limited partner units outstanding and closing unit price on March 11, 2022, and cash consideration equal to $329.0 million, inclusive of final working capital adjustments for an aggregate transaction value of $678.0 million (the “HEP Transaction” and together with the HFC Transactions, the “Sinclair Transactions”). The cash consideration was funded through a draw under HEP’s senior secured revolving credit facility. The HEP Transaction was conditioned on the closing of the HFC Transactions, which occurred immediately following the HEP Transaction.

Sinclair Transportation, together with its subsidiaries, owned REH Company’s integrated crude and refined products pipelines and terminal assets, including approximately 1,200 miles of integrated crude and refined product pipeline supporting the REH Company refineries and other third-party refineries, eight product terminals and two crude terminals with approximately 4.5 million barrels of operated storage. In addition, HEP acquired Sinclair Transportation’s interests in three pipeline joint ventures for crude gathering and product offtake including: Saddle Butte Pipeline III, LLC (25.06% non-operated interest); Pioneer Investments Corp. (49.995% non-operated interest); and UNEV Pipeline, LLC ("UNEV") (the 25% non-operated interest not already owned by HEP, resulting in UNEV becoming a wholly owned subsidiary of HEP).

See Notes 1 and 2 of Notes to Consolidated Financial Statements included in “Item 8. Financial Statements” for additional information regarding the acquisitions.

Through our subsidiaries and joint ventures, we own and/or operate petroleum product and crude oil pipelines, terminal, tankage and loading rack facilities and refinery processing units that support the refining and marketing operations of ~~HollyFrontier Corporation (“HFC”)~~HF Sinclair and other refineries in the Mid-Continent, Southwest and Northwest regions of the United States. HEP, through its

- 52 -

subsidiaries and joint ventures, owns and/or operates petroleum product and crude pipelines, tankage and terminals in ~~Texas,~~Colorado, Idaho, Iowa, Kansas, Missouri, Nevada, New Mexico, Oklahoma, Texas, Utah, Washington ~~Idaho, Oklahoma, Utah, Nevada,~~and Wyoming ~~and Kansas~~ as well as refinery processing units in Utah and Kansas. ~~HFC owned 57% of our outstanding common units and the non-economic general partner interest as of December 31, 2021.~~

We generate revenues by charging tariffs for transporting petroleum products and crude oil through our pipelines, by charging fees for terminalling and storing refined products and other hydrocarbons, providing other services at our storage tanks and terminals and charging a tolling fee per barrel or thousand standard cubic feet of feedstock throughput in our refinery processing units. We do not take ownership of products that we transport, terminal, store or ~~store,~~process, and therefore, we are not directly exposed to changes in commodity prices.

We believe the long-term global refined product demand and USU.S. crude production should support high utilization rates for the refineries we serve, which in turn ~~will~~should support volumes in our product pipelines, crude gathering ~~system~~systems and terminals.

On August 2, 2021, HEP, The Sinclair Companies (“Sinclair”), and Sinclair Transportation Company, a wholly owned subsidiary of Sinclair (“STC”), entered into a Contribution Agreement (the “Contribution Agreement”) pursuant to which HEP will acquire all of the outstanding shares of STC in exchange for 21 million newly issued common units of HEP and cash consideration equal to $325 million (the “HEP Transaction”), subject to downward adjustment if, as a condition to obtaining antitrust clearanceMarket Developments

Our results for the Sinclair Transactions (as defined below), HEP agrees to divest a portion of its equity interest in UNEV Pipeline, LLC and the sales price for such interests does not exceed the threshold provided in the Contribution Agreement.

~~The Sinclair Transactions are expected to close in~~year ended December 31, 2022 subject to customary closing conditions and regulatory clearance, including the expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act (the “HSR Act”). On August 23, 2021, each of HFC and Sinclair filed its respective premerger notification and report regarding the Sinclair Transactions with the U.S. Department of Justice and the U.S. Federal Trade Commission (the “FTC”) under the HSR Act. On September 22, 2021, HFC and Sinclair each received a request for additional information and documentary material (“Second Request”) from the FTC in connection with the FTC’s review of the Sinclair Transactions. Issuance of the Second Request extends the waiting period under the HSR Act until 30 days after both HFC and Sinclair have substantially complied with the Second Request, unless the waiting period is terminated earlierwere favorably impacted by the FTC or the parties otherwise commit not to close the Sinclair Transactions for some additional period of time. HFC and Sinclair are cooperating with the FTC staff in its review and are working diligently to satisfy the closing conditions as soon as possible. In addition, the HEP Transaction is conditioned on the closing of the transactions contemplated by that certain Business Combination Agreement, dated as of August 2, 2021, by and among HFC, Sinclair and certain other parties, which will occur immediately following the HEP Transaction (the “HFC Transaction,” and together with the HEP Transaction, the “Sinclair Transactions”). See Note 2 of Notes to Consolidated Financial Statements included in “Item 1. Financial Statements” for additional information.

~~Impact of COVID-19 on Our Business~~

~~Our business depends in large part on the~~global demand for ~~the various petroleum products we transport, terminal~~transportation fuels, lubricants and store in the markets we serve. The initial impact of the COVID-19 pandemic on the global macroeconomy created diminished demand, as well as lack of forward visibility, for refined products and crude oil transportation and ~~for the terminalling and storage~~terminal services ~~that we provide. Since the declines in demand at the beginning of the COVID-19 pandemic, we began~~having returned to ~~see improvement in demand for these products and services beginning late in the second quarter of 2020 that continued through the fourth quarter of 2021, with aggregate volumes approaching~~ pre-pandemic levels. We expect our customers will continue to adjust refinery production levels commensurate with market ~~demand and ultimately expect demand to return to pre-COVID-19 levels.~~

~~- 52 -~~

Most of our employees have returned to work at our locations, and we continue to follow Centers for Disease Control and local government guidance. We will continue to monitor developments in the COVID-19 pandemic and the dynamic environment it has created to properly address these policies going forward.

In 2022, HEP expects to hold its quarterly distribution constant at $0.35 per unit, or $1.40 on an annualized basis. HEP remains committed to its distribution strategy focused on funding all capital expenditures and distributions within operating cash flow and maintaining distributable cash flow coverage of 1.3x or greater with the goal of reducing leverage to 3.0-3.5x.

On March 27, 2020, the United States government passed the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), an approximately $2 trillion stimulus package that included various provisions intended to provide relief to individuals and businesses in the form of tax changes, loans and grants, among others. At this time, we have not sought relief in the form of loans or grants from the CARES Act; however, we have benefited from certain tax deferrals in the CARES Act and may benefit from other tax provisions if we meet the requirements to do so.

demand. The extent to which HEP’s future results are affected by the COVID-19 pandemic or volatile regional and global economic conditions will depend on various factors and consequences beyond our control, such as the duration and scope of the pandemic, the effects of any new variant strains of the underlying virus, additional actions by businesses and governments in response to the pandemic and the speed and effectiveness of responses to combat the virus.control. However, we have long-term customer contracts with minimum volume commitments, which have expiration dates from ~~2022~~2023 to ~~2036.~~2037. These minimum volume commitments accounted for approximately ~~76% of~~70% of our total ~~revenues in~~tariffs and fees billed to customers for both the years ended December 31, 2022 and 2021. We are currently not aware of any reasons that would prevent such customers from making the minimum payments required under the contracts or potentially making payments in excess of the minimum payments. In addition to these payments, we also expect to collect payments for services provided to uncommitted shippers. ~~There have been no material changes to customer payment terms due to the COVID-19 pandemic.~~

The COVID-19 pandemic, and the volatile regional and global economic conditions stemming from it, could also exacerbate the risk factors identified in this Form 10-K under “Risk Factors” in Item 1A. The COVID-19 pandemic may also materially adversely affect our results in a manner that is either not currently known or that we do not currently consider to be a significant risk to our business.

Investment in Joint Venture

On October 2, 2019, HEP Cushing LLC (“HEP Cushing”), a ~~wholly-owned~~wholly owned subsidiary of HEP, and Plains Marketing, L.P., a ~~wholly-owned~~wholly owned subsidiary of Plains All American Pipeline, L.P. (“Plains”), formed a 50/50 joint venture, Cushing Connect Pipeline & Terminal LLC (the “Cushing Connect Joint Venture”), for (i) the development, construction, ownership and operation of a new 160,000 barrel per day common carrier crude oil pipeline (the “Cushing Connect Pipeline”) that ~~will connect~~connected the Cushing, Oklahoma crude oil hub to the Tulsa, Oklahoma refining complex owned by a subsidiary of ~~HFC~~HF Sinclair and (ii) the ownership and operation of 1.5 million barrels of crude oil storage in Cushing, Oklahoma (the “Cushing Connect JV Terminal”). The Cushing Connect JV Terminal went in service during the second quarter of 2020, and the Cushing Connect Pipeline was placed into service at the end of the third quarter of 2021. Long-term commercial agreements have been entered into to support the Cushing Connect Joint Venture assets.

The Cushing Connect Joint Venture ~~has~~ contracted with an affiliate of HEP to manage the construction and operation of the Cushing Connect Pipeline and with an affiliate of Plains to manage the operation of the Cushing Connect JV Terminal. The total Cushing Connect Joint Venture investment ~~will~~was generally be shared equally among the partners. However, we ~~are~~were solely responsible for any Cushing Connect Pipeline construction costs that ~~exceed~~exceeded the budget by more than 10%. ~~HEP estimates its~~HEP's share of the cost of the Cushing Connect JV Terminal contributed by Plains and Cushing Connect Pipeline construction costs ~~are~~was approximately ~~$70 million to $75~~$74 million, including ~~$4 million to $6~~approximately $5 million of Cushing Connect Pipeline construction costs ~~exceeding~~that exceeded the budget by more than 10% ~~to be~~ borne solely by HEP.

Agreements with ~~HFC~~HF Sinclair

We serve ~~HFC's~~HF Sinclair's refineries under long-term pipeline, terminal, tankage and refinery processing unit throughput agreements expiring from ~~2022~~2023 to ~~2036.~~2037. Under these agreements, ~~HFC~~HF Sinclair agrees to transport, store, and process throughput volumes of refined product, crude oil and feedstocks on our pipelines, terminal, tankage, loading rack facilities and refinery processing units that result in minimum annual payments to us. These minimum annual payments or revenues are subject to annual rate adjustments on July 1st each year based on the PPI or the FERC index. On December 17, 2020, FERC established a new price index for the five-year period commencing July 1, 2021 and ending June 30, 2026, in which common carriers charging indexed rates are permitted to adjust their indexed ceilings annually by Producer Price Index plus 0.78%. FERC received requests for rehearing of its December 17, 2020 order, and on January 20, 2022, FERC revised the index level used to determine annual changes to interstate oil pipeline rate ceilings to Producer Price Index minus 0.21%. The order ~~requires~~required the recalculation of the July 1, 2021

~~- 53 -~~

index ceilings to be effective as of March 1, 2022. As of December 31, ~~2021,~~2022, these agreements with ~~HFC~~HF Sinclair required minimum annualized payments to us of ~~$352.8~~$453 million.

- 53 -

If ~~HFC~~HF Sinclair fails to meet its minimum volume commitments under the agreements in any quarter, it will be required to pay us the amount of any shortfall in cash by the last day of the month following the end of the quarter. Under certain of the agreements, a shortfall payment may be applied as a credit in the following four quarters after minimum obligations are met.

A significant reduction in revenues under the ~~HFC~~HF Sinclair agreements could have a material adverse effect on our results of operations.

On June 1, 2020, HFC announced plans to permanently cease petroleum refining operations at its Cheyenne refinery (the "Cheyenne Refinery") and to convert certain assets at that refinery to renewable diesel production. HFC subsequently began winding down petroleum refining operations at ~~its~~the Cheyenne ~~refinery~~Refinery on August 3, 2020.

On February 8, 2021, HEP and HFC finalized and executed new agreements for ~~HEP's~~HEP’s Cheyenne assets with the following terms, in each case effective January 1, 2021: (1) a ten-year lease with two five-year renewal option periods for HFC’s (and now HF Sinclair’s) use of certain HEP tank and rack assets in the Cheyenne ~~refinery~~Refinery to facilitate renewable diesel production with an annual lease payment of approximately $5 million, (2) a five-year contango service fee arrangement that will utilize HEP tank assets inside the Cheyenne ~~refinery~~Refinery where HFC (and now HF Sinclair) will pay a base tariff to HEP for available crude oil storage and HFC (and now HF Sinclair) and HEP will split any profits generated on crude oil contango opportunities and (3) HFC paid a $10 million one-time cash payment ~~from HFC~~ to HEP for the termination of the existing minimum volume commitment.

Under certain provisions of an omnibus agreement that we have with ~~HFC~~HF Sinclair (“Omnibus Agreement”), we pay ~~HFC~~HF Sinclair an annual administrative fee, ~~($2.6~~currently $5.0 million ~~in 2021),~~ for the provision by ~~HFC~~HF Sinclair or its affiliates of various general and administrative services to us. ~~This~~In connection with the HEP Transaction, we paid HF Sinclair a temporary monthly fee ~~does not include~~of $62,500 through November 30, 2022, relating to transition services provided to HEP by HF Sinclair. Neither the annual administrative fee nor the temporary fee includes the salaries of personnel employed by ~~HFC~~HF Sinclair who perform services for us on behalf of HLS or the cost of their employee benefits, which are separately charged to us by ~~HFC.~~HF Sinclair. We also reimburse ~~HFC~~HF Sinclair and its affiliates for direct expenses they incur on our behalf.

Under HLS’s Secondment Agreement with ~~HFC,~~HF Sinclair, certain employees of ~~HFC~~HF Sinclair are seconded to HLS to provide operational and maintenance services for certain of our processing, refining, pipeline and tankage assets, and HLS reimburses ~~HFC~~HF Sinclair for its prorated portion of the wages, benefits, and other costs of these employees for our benefit.

We have a long-term strategic relationship with HFC (and now HF Sinclair) that has historically facilitated our growth. Our future growth plans include organic projects around our existing assets and select investments or acquisitions that enhance our service platform while creating accretion for our unitholders. While in the near term, any acquisitions would be subject to economic conditions discussed in “Overview - ~~Impact of COVID-19 on Our Business”~~Market Developments” above, we also expect over the longer term to continue to work with ~~HFC~~HF Sinclair on logistic asset acquisitions in conjunction with ~~HFC’s~~HF Sinclair’s refinery acquisition strategies. See “Overview” above for a discussion of the Sinclair Transactions.

Furthermore, as demonstrated by the HEP Transaction, we plan to continue to pursue third-party logistic asset acquisitions that are accretive to our unitholders and increase the diversity of our revenues.

A more detailed discussion of our financial condition at December 31, ~~2021~~2022 and ~~2020~~2021 and operating results for the years ended December 31, 2022, 2021 and 2020 is presented in the following sections. Discussions of year-over-year comparisons for 2020 and 2019 can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2020.

RESULTS OF OPERATIONS (Unaudited)

Income, Distributable Cash Flow and Volumes

The following tables present income, distributable cash flow and volume information for the years ended December 31, 2022, 2021 ~~2020~~ and ~~2019.~~2020.

- 54 -


		Years Ended December 31,				Change from			Years Ended December 31,				Change from
		2021		2020		2020			2022		2021		2021
		(In thousands, except per unit data)							(In thousands, except per unit data)
Revenues	Revenues							Revenues
Pipelines:	Pipelines:							Pipelines:
Affiliates—refined product pipelines	Affiliates—refined product pipelines	$	69,351	$	73,571	$	(4,220)	Affiliates—refined product pipelines	$	84,535	$	69,351	$	15,184
Affiliates—intermediate pipelines	Affiliates—intermediate pipelines	30,101		30,023		78		Affiliates—intermediate pipelines	32,192		30,101		2,091
Affiliates—crude pipelines	Affiliates—crude pipelines	77,768		80,026		(2,258)		Affiliates—crude pipelines	84,026		77,768		6,258
		177,220		183,620		(6,400)			200,753		177,220		23,533
Third parties—refined product pipelines	Third parties—refined product pipelines	38,064		43,371		(5,307)		Third parties—refined product pipelines	28,709		38,064		(9,355)
Third parties—crude pipelines	Third parties—crude pipelines	47,826		38,843		8,983		Third parties—crude pipelines	55,989		47,826		8,163
		263,110		265,834		(2,724)			285,451		263,110		22,341
Terminals, tanks and loading racks:	Terminals, tanks and loading racks:							Terminals, tanks and loading racks:
Affiliates	Affiliates	124,511		135,867		(11,356)		Affiliates	143,310		124,511		18,799
Third parties	Third parties	17,756		15,825		1,931		Third parties	24,502		17,756		6,746
		142,267		151,692		(9,425)			167,812		142,267		25,545

Affiliates—refinery processing units	Affiliates—refinery processing units	89,118		80,322		8,796		Affiliates—refinery processing units	94,217		89,118		5,099

Total revenues	Total revenues	494,495		497,848		(3,353)		Total revenues	547,480		494,495		52,985
Operating costs and expenses	Operating costs and expenses							Operating costs and expenses
Operations (exclusive of depreciation and amortization)	Operations (exclusive of depreciation and amortization)	170,524		147,692		22,832		Operations (exclusive of depreciation and amortization)	210,623		170,524		40,099
Depreciation and amortization	Depreciation and amortization	93,800		99,578		(5,778)		Depreciation and amortization	99,092		93,800		5,292
General and administrative	General and administrative	12,637		9,989		2,648		General and administrative	17,003		12,637		4,366
Goodwill impairment	Goodwill impairment	11,034		35,653		(24,619)		Goodwill impairment	—		11,034		(11,034)
		287,995		292,912		(4,917)			326,718		287,995		38,723
Operating income	Operating income	206,500		204,936		1,564		Operating income	220,762		206,500		14,262
Other income (expense):	Other income (expense):							Other income (expense):
Equity in earnings of equity method investments		12,432		6,647		5,785
Equity in earnings (losses) of equity method investments								Equity in earnings (losses) of equity method investments	(260)		12,432		(12,692)
Interest expense, including amortization	Interest expense, including amortization	(53,818)		(59,424)		5,606		Interest expense, including amortization	(82,560)		(53,818)		(28,742)
Interest income	Interest income	29,925		10,621		19,304		Interest income	91,406		29,925		61,481
Loss on early extinguishment of debt		—		(25,915)		25,915

Gain on sales-type leases	Gain on sales-type leases	24,677		33,834		(9,157)		Gain on sales-type leases	—		24,677		(24,677)
Gain on sale of assets and other	Gain on sale of assets and other	6,179		8,691		(2,512)		Gain on sale of assets and other	668		6,179		(5,511)

		19,395		(25,546)		44,941			9,254		19,395		(10,141)
Income before income taxes	Income before income taxes	225,895		179,390		46,505		Income before income taxes	230,016		225,895		4,121
State income tax expense	State income tax expense	(32)		(167)		135		State income tax expense	(111)		(32)		(79)
Net income	Net income	225,863		179,223		46,640		Net income	229,905		225,863		4,042

Allocation of net income attributable to noncontrolling interests	Allocation of net income attributable to noncontrolling interests	(10,917)		(8,740)		(2,177)		Allocation of net income attributable to noncontrolling interests	(13,122)		(10,917)		(2,205)
Net income attributable to the partners	Net income attributable to the partners	214,946		170,483		44,463		Net income attributable to the partners	$	216,783	$	214,946	$	1,837

Limited partners’ earnings per unit—basic and diluted	Limited partners’ earnings per unit—basic and diluted	$	2.03	$	1.61	$	0.42	Limited partners’ earnings per unit—basic and diluted	$	1.77	$	2.03	$	(0.26)
Weighted average limited partners’ units outstanding	Weighted average limited partners’ units outstanding	105,440		105,440		—		Weighted average limited partners’ units outstanding	122,298		105,440		16,858
EBITDA (1)	EBITDA (1)	$	332,671	$	319,031	$	13,640	EBITDA (1)	$	307,140	$	332,671	$	(25,531)
Adjusted EBITDA (1)	Adjusted EBITDA (1)	$	339,203	$	345,978	$	(6,775)	Adjusted EBITDA (1)	$	415,332	$	339,203	$	76,129
Distributable cash flow (2)	Distributable cash flow (2)	$	269,805	$	283,057	$	(13,252)	Distributable cash flow (2)	$	307,489	$	269,805	$	37,684

Volumes (bpd)	Volumes (bpd)							Volumes (bpd)
Pipelines:	Pipelines:							Pipelines:
Affiliates—refined product pipelines	Affiliates—refined product pipelines	108,767		115,827		(7,060)		Affiliates—refined product pipelines	143,303		108,767		34,536
Affiliates—intermediate pipelines	Affiliates—intermediate pipelines	125,225		137,053		(11,828)		Affiliates—intermediate pipelines	129,295		125,225		4,070
Affiliates—crude pipelines	Affiliates—crude pipelines	279,514		277,025		2,489		Affiliates—crude pipelines	456,797		279,514		177,283
		513,506		529,905		(16,399)			729,395		513,506		215,889
Third parties—refined product pipelines	Third parties—refined product pipelines	49,356		45,685		3,671		Third parties—refined product pipelines	38,000		49,356		(11,356)
Third parties—crude pipelines	Third parties—crude pipelines	129,084		110,691		18,393		Third parties—crude pipelines	144,478		129,084		15,394
		691,946		686,281		5,665			911,873		691,946		219,927
Terminals and loading racks:	Terminals and loading racks:							Terminals and loading racks:
Affiliates	Affiliates	391,698		393,300		(1,602)		Affiliates	560,038		391,698		168,340
Third parties	Third parties	51,184		48,909		2,275		Third parties	38,211		51,184		(12,973)
		442,882		442,209		673			598,249		442,882		155,367

Affiliates—refinery processing units	Affiliates—refinery processing units	69,628		61,416		8,212		Affiliates—refinery processing units	70,222		69,628		594

Total for pipelines, terminals and refinery processing unit assets (bpd)	Total for pipelines, terminals and refinery processing unit assets (bpd)	1,204,456		1,189,906		14,550		Total for pipelines, terminals and refinery processing unit assets (bpd)	1,580,344		1,204,456		375,888

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Our discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities as of the date of the financial statements. Actual results may differ from these estimates under different assumptions or conditions. We consider the following policies to be the most critical to understanding the judgments that are involved and the uncertainties that could impact our results of operations, financial condition and cash flows.

Revenue Recognition

Revenues are generally recognized as products are shipped through our pipelines and terminals, feedstocks are processed through our refinery processing units or other services are rendered. The majority of our contracts with customers meet the definition of a lease since (1) performance of the contracts is dependent on specified property, plant, or equipment and (2) the possibility is remote that one or more parties other than the customer will take more than a minor amount of the output associated with the specified property, plant, or equipment. Prior to the adoption of the new lease standard (see below), we bifurcated the consideration received between lease and service revenue. The new lease standard allows the election of a practical expedient whereby a lessor does not have to separate non-lease (service) components from lease components under certain conditions. The majority of our contracts meet these conditions, and we have made this election for those contracts. Under this practical expedient, we treat the combined components as a single performance obligation in accordance with Accounting Standards Codification (“ASC”) 606, which largely codified ASU 2014-09, if the non-lease (service) component is

~~- 66 -~~

the dominant component. If the lease component is the dominant component, we treat the combined components as a lease in accordance with ASC 842, which largely codified ASU 2016-02.

Several of our contracts include incentive or reduced tariffs once a certain quarterly volume is met. Revenue from the variable element of these transactions is recognized based on the actual volumes shipped as it relates specifically to rendering the services during the applicable quarter.

The majority of our long-term transportation contracts specify minimum volume requirements, whereby, we bill a customer for a minimum level of shipments in the event a customer ships below their contractual requirements. If there are no future performance obligations, we will recognize these deficiency payments in revenue.

In certain of these throughput agreements, a customer may later utilize such shortfall billings as credit towards future volume shipments in excess of its minimum levels within its respective contractual shortfall make-up period. Such amounts represent an obligation to perform future services, which may be initially deferred and later recognized as revenue based on estimated future shipping levels, including the likelihood of a customer’s ability to utilize such amounts prior to the end of the contractual shortfall make-up period. We recognize these deficiency payments in revenue when we do not expect we will be required to satisfy these performance obligations in the future based on the pattern of rights projected to be exercised by the customer.

Leases

We adopted ASC 842 effective January 1, 2019, and elected to adopt using the modified retrospective transition method and practical expedients, both of which are provided as options by the standard and further defined below.

Lessee Accounting - At inception, we determine if an arrangement is or contains a lease. Right-of-use assets represent our right to use an underlying asset for the lease term, and lease liabilities represent our payment obligation under the leasing arrangement. Right-of-use assets and lease liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. We use our estimated incremental borrowing rate (“IBR”) to determine the present value of lease payments as most of our leases do not contain an implicit rate. Our IBR represents the interest rate which we would pay to borrow, on a collateralized basis, an amount equal to the lease payments over a similar term in a similar economic environment. We use the implicit rate when readily determinable.

Operating leases are recorded in operating lease right-of-use assets and current and noncurrent operating lease liabilities on our consolidated balance sheet. Finance leases are included in properties and equipment, current finance lease liabilities and noncurrent finance lease liabilities on our consolidated balance sheet.

When renewal options are defined in a lease, our lease term includes an option to extend the lease when it is reasonably certain we will exercise that option. Leases with a term of 12 months or less are not recorded on our balance sheet, and lease expense is accounted for on a straight-line basis. In addition, as a lessee, we separate non-lease components that are identifiable and exclude them from the determination of net present value of lease payment obligations.

- 68 -

Lessor Accounting - Customer contracts that contain leases are generally classified as either operating leases, direct finance leases or sales-type leases. We consider inputs such as the lease term, fair value of the underlying asset and residual value of the underlying assets when assessing the classification.

Goodwill and Long-Lived Assets

Goodwill represents the excess of our cost of an acquired business over the fair value of the assets acquired, less liabilities assumed. Goodwill is not amortized. We test goodwill at the reporting unit level for impairment annually and between annual tests if events or changes in circumstances indicate the carrying amount may exceed fair value. Our goodwill impairment testing first entails a comparison of our reporting unit fair values relative to their respective carrying values, including goodwill. If carrying value exceeds the estimated fair value for a reporting unit, we measure goodwill impairment as the excess of the carrying amount of the reporting unit over the estimated fair value of the reporting unit.

~~The~~Our annual goodwill impairment testing for 2022 and 2021 was performed on a qualitative basis during the third quarters of 2022 and 2021. We assessed qualitative factors such as macroeconomic conditions, cost factors and reporting unit financial performance and determined it was not more likely than not that fair value of our reporting units was less than the respective carrying value. Therefore, in accordance with GAAP, further testing was not required.

During the first quarter of 2021, changes ~~due to~~in our ~~new~~ agreements with HFC related to our Cheyenne assets resulted in an increase in the ~~net book value~~carrying amount of our Cheyenne reporting unit ~~during the first quarter of 2021~~ due to sales-type lease accounting, which led us to determine indicators of potential goodwill impairment for our Cheyenne reporting unit were present. ~~Therefore, we performed an interim quantitative review of our Cheyenne reporting unit goodwill for the first quarter of 2021.~~

~~- 67 -~~

The estimated fair value of our Cheyenne reporting unit was derived using a combination of income and market approaches. The income approach reflects expected future cash flows based on anticipated gross margins, operating costs and capital expenditures. The market approaches include both the guideline public company and guideline transaction methods. Both methods utilize pricing multiples derived from historical market transactions of other like-kind assets. These fair value measurements involve significant unobservable inputs (Level 3 inputs). See Note 6 for further discussion of Level 3 inputs.

Our interim impairment testing of our Cheyenne reporting unit goodwill identified an impairment charge of $11.0 million, which was recorded in the three months ended March 31, 2021.

Our annual goodwill ~~impairment~~ testing for 2020 was performed on a ~~qualitative~~quantitative basis during the third quarter of 2021. We assessed qualitative factors such as macroeconomic conditions, cost factors, and reporting unit financial performance and determined it was not more likely than not that fair value of our reporting units was less than the respective carrying value. Therefore, in accordance with GAAP, further testing was not required.

~~In 2020, our annual goodwill testing was performed on a quantitative basis with the~~2020. The estimated fair value of our reporting units derived using a combination of both income and market approaches as described above. Our annual testing of goodwill ~~did not identify any impairments other than~~in 2020 identified an impairment charge of $35.7 million, which was recorded in the third quarter of 2020, related to our Cheyenne reporting ~~unit, which reported goodwill impairment charges of $35.7 million for the year ending December 31, 2020.~~unit.

We evaluate long-lived assets, including finite-lived intangible assets, for potential impairment by identifying whether indicators of impairment exist and, if so, assessing whether the long-lived assets are recoverable from estimated future undiscounted cash flows. The actual amount of impairment loss, if any, to be recorded is equal to the amount by which a long-lived asset’s carrying value exceeds its fair value.

Valuation of Business Combinations

We recognize and measure the assets acquired and liabilities assumed in a business combination based on their estimated fair values at the acquisition date. Any excess or surplus of the purchase consideration when compared to the fair value of the net tangible assets acquired, if any, is recorded as goodwill or gain from a bargain purchase. The fair value of assets and liabilities as of the acquisition date are often estimated using a combination of approaches, including the income approach, which requires us to project future cash flows and apply an appropriate discount rate; the cost approach, which requires estimates of replacement costs and depreciation and obsolescence estimates; and the market approach which uses market data and adjusts for entity-specific differences. We use all available information to make these fair value determinations and engage third-party consultants for valuation assistance. The estimates used in determining fair values are based on assumptions believed to be reasonable but which are inherently uncertain. Accordingly, actual results may differ materially from the projected results used to determine fair value.

Contingencies

We are subject to proceedings, lawsuits and other claims related to environmental, labor, product and other matters. We are required to assess the likelihood of any adverse judgments or outcomes to these matters as well as potential ranges of probable losses. A determination of the amount of reserves required, if any, for these contingencies is made after careful analysis of each individual issue. The required reserves may change in the future due to new developments in each matter or changes in approach such as a change in settlement strategy in dealing with these matters.

- 69 -

RISK MANAGEMENT

The market risk inherent in our debt positions is the potential change arising from increases or decreases in interest rates as discussed below.

At December 31, ~~2021,~~2022, we had an outstanding principal balance of ~~$500~~$900.0 million on our 5% Senior Notes. A change in interest rates generally would affect the fair value of the 5% Senior Notes, but not our earnings or cash flows. At December 31, ~~2021,~~2022, the fair value of our 5% Senior Notes was ~~$502.7~~$852.7 million. We estimate a hypothetical 10% change in the yield-to-maturity applicable to the 5% Senior Notes at December 31, ~~2021,~~2022, would result in a change of approximately ~~$12.9~~$24.2 million in the fair value of the underlying 5% Senior Notes.

For the variable rate Credit Agreement, changes in interest rates would affect cash flows, but not the fair value. At December 31, ~~2021,~~2022, borrowings outstanding under the Credit Agreement were ~~$840.0~~$668.0 million. A hypothetical 10% change in interest rates applicable to the Credit Agreement would not materially affect our cash flows.

~~Borrowings~~At our election, certain borrowings under our variable rate Credit Agreement bear interest at a variable rate based on the ~~London Interbank Offered Rate~~secured overnight financing rate (“~~LIBOR”). The ICE Benchmark Administration Limited (“IBA”~~SOFR”) announced that it will cease calculating and publishing all USD LIBOR tenors on June 30, 2023, and ceased calculating and publishing certain USD LIBOR tenors on December 31, 2021. Further, U.K. and U.S. regulatory authorities issued statements encouraging banks to cease entering into new USD LIBOR based loansas administered by ~~no later than December 31, 2021 and to continue to transition away from USD LIBOR based loans in preparation~~the Federal Reserve Bank of IBA ceasing to calculate and publish LIBOR based rates on June 30, 2023. These developments may cause fluctuations in LIBOR rates and pricing of USD LIBOR based loans that are not transitioned to an alternative reference rate. While we do not expect the transition to an alternative reference rate to have a significant impact on our business or operations, it is possible that the use of alternative reference rates or other reforms could cause the market value of, the applicable interest rate on and the amount of interest paid on our variable rate indebtedness to be materially different than expected and could cause our interest expense to increase.New York.

Our operations are subject to normal hazards of operations, including fire, explosion and weather-related perils. We maintain various insurance coverages, including business interruption insurance, subject to certain deductibles. We are not fully insured against certain risks because such risks are not fully insurable, coverage is unavailable, or premium costs, in our judgment, do not justify such expenditures.

~~- 68 -~~

We have a risk management oversight committee that is made up of members from our senior management. This committee monitors our risk environment and provides direction for activities to mitigate, to an acceptable level, identified risks that may adversely affect the achievement of our goals.

Item 7A.Quantitative and Qualitative Disclosures about Market Risk

Market risk is the risk of loss arising from adverse changes in market rates and prices. See “Risk Management” under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” for a discussion of market risk exposures that we have with respect to our long-term debt. We utilize derivative instruments to hedge our interest rate exposure, as discussed under “Risk Management.”

Since we do not own products shipped on our pipelines or terminalled at our terminal facilities, we do not have direct market risks associated with commodity prices.

- 6970 -

Item 8.Financial Statements and Supplementary Data

MANAGEMENT’S REPORT ON ITS ASSESSMENT OF THE PARTNERSHIP’S INTERNAL CONTROL OVER FINANCIAL REPORTING

Management of Holly Energy Partners, L.P. (the “Partnership”) is responsible for establishing and maintaining adequate internal control over financial reporting.

All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.

Management assessed the Partnership’s internal control over financial reporting as of December 31, ~~2021,~~2022, using the criteria for effective control over financial reporting established in “Internal Control – Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework). Based on this assessment, management concluded that, as of December 31, ~~2021,~~2022, the Partnership maintained effective internal control over financial reporting. Management’s assessment of, and conclusion on, the effectiveness of internal control over financial reporting did not include the internal controls of the HEP Acquired Sinclair Businesses, that were acquired on March 14, 2022, as we are in the process of integrating operations of the HEP Acquired Sinclair Businesses, including internal controls over financial reporting. The HEP Acquired Sinclair Businesses accounted for approximately 26% of the Partnership's consolidated total assets and 5% of consolidated total revenues of the Partnership as of and for the year ended December 31, 2022.

The Partnership’s independent registered public accounting firm has issued an attestation report on the effectiveness of the Partnership’s internal control over financial reporting as of December 31, ~~2021.~~2022. That report appears on page ~~70.~~72.

- 7071 -

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Unitholders of Holly Energy Partners, L.P. and the Board of Directors of Holly Logistic Services, L.L.C.

Opinion on Internal Control Over Financial Reporting

We have audited Holly Energy Partners, L.P.’s internal control over financial reporting as of December 31, ~~2021,~~2022, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, Holly Energy Partners, L.P. (the Partnership) maintained, in all material respects, effective internal control over financial reporting as of December 31, ~~2021,~~2022, based on the COSO criteria.

As indicated in the accompanying Management’s Report on its Assessment of the Partnership’s Internal Control Over Financial Reporting, management’s assessment of and conclusion on the effectiveness of internal control over financial reporting did not include the internal controls of the HEP Acquired Sinclair Businesses, which is included in the 2022 consolidated financial statements of the Partnership and constituted approximately 26% of consolidated total assets as of December 31, 2022 and 5% of consolidated total revenues for the year then ended. Our audit of internal control over financial reporting of the Company also did not include an evaluation of the internal control over financial reporting of the HEP Acquired Sinclair Businesses.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Partnership as of December 31, ~~2021~~2022 and ~~2020,~~2021, the related consolidated statements of income, cash flows, and equity for each of the three years in the period ended December 31, ~~2021,~~2022, and the related notes of the Partnership, and our report dated February ~~23, 2022~~28, 2023 expressed an unqualified opinion thereon.

Basis for Opinion

The Partnership’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on its Assessment of the Partnership’s Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Partnership’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Partnership in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.

Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ Ernst & Young LLP

Dallas, Texas

February ~~23, 2022~~28, 2023

- 7172 -

Index to Consolidated Financial Statements

- 7273 -

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To Unitholders of Holly Energy Partners, L.P. and the Board of Directors of Holly Logistic Services, L.L.C.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Holly Energy Partners, L.P. (the Partnership) as of December 31, ~~2021~~2022 and ~~2020,~~2021, the related consolidated statements of income, cash flows, and equity for each of the three years in the period ended December 31, ~~2021,~~2022, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Partnership at December 31, ~~2021~~2022 and ~~2020,~~2021, and the results of its operations and its cash flows for each of the three years in the period ended December 31, ~~2021,~~2022, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Partnership's internal control over financial reporting as of December 31, ~~2021,~~2022, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated February ~~23, 2022~~28, 2023 expressed an unqualified opinion thereon.

Basis for Opinion

These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on the Partnership’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Partnership in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

~~- 73 -~~


			~~Revenue Recognition~~

~~Description of the Matter~~			For the year ended December 31, 2021, the Partnership’s total revenues were $494.5 million. As discussed in Note 1 and Note 4 of the financial statements, revenues are generally recognized as products are shipped through pipelines and terminals, feedstocks are processed through the refinery processing units or other services are rendered. The majority of the Partnership’s long-term throughput agreements with customers specify minimum volume requirements. In the event a customer does not fulfill minimum volume requirements during a contractual period, the Partnership can bill the customer for the minimum level. In certain contracts, a customer may later utilize these shortfall billings as credit towards future throughput volumes in excess of minimum levels within a respective contractual shortfall make-up period. Shortfall billing amounts represent an obligation to provide future shipping services and may be initially deferred and later recognized as revenue. Recognition is based on estimated future throughput volumes, including the likelihood of a customer’s ability to utilize such amounts prior to the end of the contractual shortfall make-up period or when the Partnership does not expect to be required to satisfy these performance obligations in the future based on the pattern of rights exercised by the customer. Auditing the measurement of the Partnership’s revenue was complex and judgmental due to various contractual provisions used in customer agreements and measurement uncertainty associated with management’s estimates of deferred revenue related to the future utilization of shortfall billings.

~~How We Addressed the Matter in Our Audit~~			We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Partnership’s revenue recognition process. This included testing relevant controls over the review of the accounting analysis upon execution of a customer contract, as well as controls over management’s estimates affecting deferred revenue associated with shortfall billings. Our audit procedures over the Partnership’s revenue included, among others, testing a sample of revenue transactions to evaluate whether revenue was recorded in accordance with the contract terms, performing recalculations of the deferred revenue amounts related to shortfall billings, and testing management’s estimation of deferred revenue based on historical pattern of rights exercised by the customer and expected future usage.

			Sales-Type Lease Accounting

Description of the Matter			As disclosed in Note 5 of the financial statements, the Partnership entered into new agreements and amended other agreements which met the criteria of sales-type ~~leases since the underlying assets are not expected to have an alternative use at the end of the lease terms.~~leases. Under sales-type lease accounting, the lessor recognizes a net investment in the lease and derecognizes the underlying asset with ~~the~~any difference recorded as a gain or loss at the lease commencement date. During the year ended December 31, ~~2021,~~2022, the Partnership recorded total net investment in ~~the~~ leases of ~~$148.4 million and recognized gains on the sales-type leases totaling $24.7~~$234.7 million. Auditing management’s accounting for ~~certain~~ sales-type leases ~~specifically those related to lube racks constructed in prior years,~~ was complex and highly judgmental due to the estimation uncertainty in determining the fair value of the underlying leased assets at the commencement date of the leases. The fair value of the underlying leased assets is factored into the Partnership’s determination of the net investment in the leases. The fair value estimates for these assets were sensitive to significant assumptions ~~and inputs used based on a~~including replacement cost ~~valuation method, such~~ as ~~estimates of the replacement cost and the effective age of the assets.~~adjusted for physical deterioration. These assumptions have a significant effect on the fair value ~~estimate.~~estimates of the assets acquired.

- 74 -



How We Addressed the Matter in Our Audit			We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Partnership's evaluation of the lease classification and related accounting for the sales-type leases. For example, we tested controls over management's review of the significant inputs and assumptions used in estimating the fair value of the underlying leased assets. To test the Partnership’s accounting for the sales-type leases, ~~involving the previously constructed lube racks, including the estimated fair value of the underlying leased assets, we performed~~our audit procedures ~~that~~ included, among others, ~~assessing methodologies and testing~~evaluating the Partnership’s selection of the valuation methodology, evaluating the significant assumptions ~~discussed above and the underlying data~~ used by the Partnership, ~~in its analysis. We compared~~and evaluating the completeness and accuracy of the underlying data supporting the significant ~~replacement cost~~ assumptions ~~used by management to recent expenditures for similar assets.~~and estimates. We ~~also inspected supporting documentation, such as evidence related to maintenance records, to assess the effective age of the assets. In addition, we~~ involved ~~our~~ valuation specialists to assist with our evaluation of the methodologies used by the Partnership and significant assumptions included in the fair value estimates. Specifically, our valuation specialists assisted by comparing those assumptions to current industry and market data and developing an expected range of values based on significant inputs and assumptions to assess reasonableness of the Partnership’s estimates.

			Valuation of Personal Property Assets in the Sinclair Transportation Company Acquisition

Description of the Matter			During 2022, the Partnership completed its acquisition of Sinclair Transportation Company for an aggregate $678.0 million in cash and common limited partner units, as disclosed in Note 2 to the consolidated financial statements. The transaction was accounted for as a business combination. Of the total assets acquired and liabilities assumed, the Partnership acquired $340.7 million of properties, plant, and equipment, which was made up of real and personal property. Auditing management's accounting for the acquisition of Sinclair Transportation Company was complex due to the significant estimation uncertainty in determining the fair value of certain properties, plant and equipment. In particular, the fair value estimates for Sinclair Transportation Company personal property were sensitive to significant assumptions including replacement cost as adjusted for physical deterioration. These assumptions have a significant effect on the fair value estimates of the assets acquired.

How We Addressed the Matter in Our Audit			We obtained an understanding, evaluated the design and tested the operating effectiveness of the Partnership's controls over the valuation of the personal property assets related to the acquisition. For example, we tested controls over management’s review of the valuation models and the underlying assumptions used to develop estimated values of these assets. To test the estimated fair value of the personal property, our audit procedures included, among others, evaluating the Partnership’s selection of the valuation methodology, evaluating the significant assumptions used by the Partnership, and evaluating the completeness and accuracy of the underlying data supporting the significant assumptions and estimates. We involved valuation specialists to assist with our evaluation of the methodologies used by the Partnership and significant assumptions included in the fair value estimates. Specifically, our valuation specialists assisted by comparing those assumptions to current industry and market data and developing an expected range of values based on significant inputs and assumptions to assess reasonableness of the Partnership’s estimates.

/s/ Ernst & Young LLP

We have served as the Partnership's auditor since 2003.

Dallas, Texas

February ~~23, 2022~~

28, 2023

- 75 -

HOLLY ENERGY PARTNERS, L.P.

CONSOLIDATED BALANCE SHEETS

(In thousands, except unit data)


		December 31, 2021		December 31, 2020			December 31, 2022		December 31, 2021
ASSETS	ASSETS					ASSETS
Current assets:	Current assets:					Current assets:
Cash and cash equivalents (Cushing Connect VIEs: $8,881 and $18,259, respectively)		$	14,381	$	21,990
Cash and cash equivalents (Cushing Connect VIEs: $2,147 and $8,881, respectively)						Cash and cash equivalents (Cushing Connect VIEs: $2,147 and $8,881, respectively)	$	10,917	$	14,381
Accounts receivable:	Accounts receivable:					Accounts receivable:
Trade	Trade	12,745		14,543		Trade	16,344		12,745
Affiliates	Affiliates	56,154		47,972		Affiliates	63,459		56,154
		68,899		62,515			79,803		68,899
Prepaid and other current assets	Prepaid and other current assets	11,033		9,487		Prepaid and other current assets	12,397		11,033
Total current assets	Total current assets	94,313		93,992		Total current assets	103,117		94,313

Properties and equipment, net (Cushing Connect VIEs: $— and $47,801, respectively)		1,329,028		1,450,685
Properties and equipment, net						Properties and equipment, net	1,388,888		1,329,028
Operating lease right-of-use assets	Operating lease right-of-use assets	2,275		2,979		Operating lease right-of-use assets	2,317		2,275
Net investment in leases (Cushing Connect VIEs: $100,042 and $—, respectively)		309,303		166,316
Net investment in leases (Cushing Connect VIEs: $101,871 and $100,042, respectively)						Net investment in leases (Cushing Connect VIEs: $101,871 and $100,042, respectively)	539,705		309,303
Intangible assets, net	Intangible assets, net	73,307		87,315		Intangible assets, net	59,300		73,307
Goodwill	Goodwill	223,650		234,684		Goodwill	342,762		223,650
Equity method investments (Cushing Connect VIEs: $37,505 and $39,456, respectively)		116,378		120,544
Equity method investments (Cushing Connect VIEs: $34,746 and $37,505, respectively)						Equity method investments (Cushing Connect VIEs: $34,746 and $37,505, respectively)	270,604		116,378
Deferred turnaround costs						Deferred turnaround costs	24,154		2,632
Other assets	Other assets	17,613		11,050		Other assets	16,655		14,981
Total assets	Total assets	$	2,165,867	$	2,167,565	Total assets	$	2,747,502	$	2,165,867

LIABILITIES AND EQUITY	LIABILITIES AND EQUITY					LIABILITIES AND EQUITY
Current liabilities:	Current liabilities:					Current liabilities:
Accounts payable:	Accounts payable:					Accounts payable:
Trade (Cushing Connect VIEs: $8,285 and $14,076, respectively)		$	28,577	$	28,280
Trade (Cushing Connect VIEs: $431 and $8,285, respectively)						Trade (Cushing Connect VIEs: $431 and $8,285, respectively)	$	26,753	$	28,577
Affiliates	Affiliates	11,703		18,120		Affiliates	15,756		11,703
		40,280		46,400			42,509		40,280

Accrued interest	Accrued interest	11,258		10,892		Accrued interest	17,992		11,258
Deferred revenue	Deferred revenue	14,585		11,368		Deferred revenue	12,087		14,585
Accrued property taxes	Accrued property taxes	4,542		3,992		Accrued property taxes	5,449		4,542
Current operating lease liabilities	Current operating lease liabilities	620		875		Current operating lease liabilities	968		620
Current finance lease liabilities	Current finance lease liabilities	3,786		3,713		Current finance lease liabilities	4,389		3,786
Other current liabilities	Other current liabilities	1,781		2,505		Other current liabilities	2,430		1,781
Total current liabilities	Total current liabilities	76,852		79,745		Total current liabilities	85,824		76,852

Long-term debt	Long-term debt	1,333,049		1,405,603		Long-term debt	1,556,334		1,333,049
Noncurrent operating lease liabilities	Noncurrent operating lease liabilities	2,030		2,476		Noncurrent operating lease liabilities	1,720		2,030
Noncurrent finance lease liabilities	Noncurrent finance lease liabilities	64,649		68,047		Noncurrent finance lease liabilities	62,513		64,649
Other long-term liabilities	Other long-term liabilities	12,527		12,905		Other long-term liabilities	29,111		12,527
Deferred revenue	Deferred revenue	29,662		40,581		Deferred revenue	24,613		29,662

Class B unit	Class B unit	56,549		52,850		Class B unit	60,507		56,549

Equity:	Equity:					Equity:
Partners’ equity:	Partners’ equity:					Partners’ equity:
Common unitholders (105,440,201 units issued and outstanding at both December 31, 2021 and 2020)		443,017		379,292
Common unitholders (126,440,201 and 105,440,201 units issued and outstanding at December 31, 2022 and 2021, respectively)						Common unitholders (126,440,201 and 105,440,201 units issued and outstanding at December 31, 2022 and 2021, respectively)	857,126		443,017
Total partners’ equity	Total partners’ equity	443,017		379,292		Total partners’ equity	857,126		443,017
Noncontrolling interests	Noncontrolling interests	147,532		126,066		Noncontrolling interests	69,754		147,532
Total equity	Total equity	590,549		505,358		Total equity	926,880		590,549
Total liabilities and equity	Total liabilities and equity	$	2,165,867	$	2,167,565	Total liabilities and equity	$	2,747,502	$	2,165,867


Delaware						20-0833098
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)
2828 N. Harwood, Suite 1300
Dallas
Texas						75201-1507
(Address of principal executive offices)						(Zip Code)


			401(k) Plan			~~131~~136
			5% Senior Notes			4142
			AAI			~~148~~150
			Allocation Date			50
			ASC			6768
			ASC 842			68
			ASU			6768
			bpd			89
			Board			~~111~~117
			BLM			38
			Business Combination Agreement			7
			~~CARES Act~~			5481
			Change in Control Policy			~~132~~137
			Change in Control Agreement			~~132~~137
			Cheyenne Refinery			8120
			CISA			41
			Clawback Policy			~~133~~139
			COBRA			~~145~~137
			Contribution Agreement			781
			Corps			35
			Credit Agreement			62
			Cushing Connect Joint Venture			1719
			Cushing Connect JV Terminal			1719
			Cushing Connect Pipeline			1719
			CWA			3735
			Data ~~Protection Laws~~protection obligations			41
			~~Delek~~			93
			EBITDA			5857
			Effectively connected income			49
			ESG			27
			Exchange Act			36114
			FASB ASC Topic 718			~~121~~126
			FCC			1719
			FERC			8
			Frontier Pipeline			10
			~~FTC~~			3411
			GAAP			58
			~~GHG~~			3957
			Guarantor subsidiaries			~~103~~107
			HEP			7
			HEP Cushing			1719
			HEP Logistics			~~111~~116
			HFC			7
			~~HFC Change in Control Agreements~~			~~132~~
			HFC Merger			7
			HFC Transaction			7
			HF Sinclair			7
			HLS			7
			~~HSR Act~~IBR			868
			~~IBA~~ICA			4222
			~~IBR~~Incentive Compensation			68139
			IRS			27


			~~ICA~~Long-Term Incentive Plan			19125
			~~Incentive Compensation~~			~~133~~
			~~IRS~~			25
			~~Letter Agreement~~			34
			~~LIBOR~~			42
			~~Long-Term Incentive Plan~~			~~120~~
			~~LPG~~LPGs			8
			mbbls			89
			Meridian			~~118~~124
			Mid-America			9
			MMPL			14
			MMSCFD			1112
			non-employee directors			~~119~~125
			NDC			3938
			~~New Parent~~NEPA			735
			NQDC Plan			~~120~~125
			NYSE			~~113~~118
			NWP			3335
			Omnibus ~~Agreement~~			1820
			Osage			12
			~~Outside Date~~			8758
			Parent			~~103~~107
			Parent Merger Sub			7
			Partnership			71
			PCAOB			~~118~~72
			PHMSA			1921
			Plains			910
			PMLP			8891
			PPI			9
			Presiding Director			~~112~~117
			~~Renewal~~REH			417
			RINs			81
			SCC			36
			SEC			74
			Secondment Agreement			18
			~~Second Request~~			3420
			Sinclair Oil			7
			Sinclair Transportation			7
			SLC Pipeline			1011
			~~STC~~SOFR			770
			Target Company			7
			TSA			41
			UNEV			7
			Unitholders Agreement			3588
			VIE			88
			~~Woods Cross Refinery~~			34
			~~WOTUS~~			3791


	Years Ended December 31,
	2021	2020	2019	2018	2017
Volumes transported for barrels per day (“bpd”):
HFC	513,506	529,905	633,270	622,088	556,516
Third parties	178,440	156,376	204,052	187,717	99,847
Total	691,946	686,281	837,322	809,805	656,363
Total barrels in thousands (“mbbls”)	252,560	251,178	305,623	295,579	239,572


	Years Ended December 31,
	2022	2021	2020	2019	2018
Volumes transported for barrels per day (“bpd”):
HF Sinclair	729,395	513,506	529,905	633,270	622,088
Third parties	182,478	178,440	156,376	204,052	187,717
Total	911,873	691,946	686,281	837,322	809,805
Total barrels in thousands (“mbbls”)	334,581	252,560	251,178	305,623	295,579


(Mark One)
☒			ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


Item	Item		Page	Item		Page
		PART I			PART I

Forward-Looking Statements	Forward-Looking Statements		3	Forward-Looking Statements		3

1. and 2.	1. and 2.	Business and Properties	7	1. and 2.	Business and Properties	7
1A.	1A.	Risk factors	24	1A.	Risk factors	26
1B.	1B.	Unresolved staff comments	50	1B.	Unresolved staff comments	49
3.	3.	Legal proceedings	50	3.	Legal proceedings	49
4.	4.	Mine safety disclosures	50	4.	Mine safety disclosures	50

		PART II			PART II

5.	5.	Market for the Registrant’s common units, related unitholder matters and issuer purchases of common units	51	5.	Market for the Registrant’s common units, related unitholder matters and issuer purchases of common units	51
6.	6.	[Reserved]	51	6.	[Reserved]	51
7.	7.	Management’s discussion and analysis of financial condition and results of operations	52	7.	Management’s discussion and analysis of financial condition and results of operations	52
7A.	7A.	Quantitative and qualitative disclosures about market risk	69	7A.	Quantitative and qualitative disclosures about market risk	70
8.	8.	Financial statements and supplementary data	70	8.	Financial statements and supplementary data	71
9.	9.	Changes in and disagreements with accountants on accounting and financial disclosure	108	9.	Changes in and disagreements with accountants on accounting and financial disclosure	113
9A.	9A.	Controls and procedures	108	9A.	Controls and procedures	113
9B.	9B.	Other information	108	9B.	Other information	113
9C.	9C.	Disclosure Regarding Foreign Jurisdictions that Prevent Inspections	108	9C.	Disclosure Regarding Foreign Jurisdictions that Prevent Inspections	113

		PART III			PART III

10.	10.	Directors, executive officers and corporate governance	110	10.	Directors, executive officers and corporate governance	115
11.	11.	Executive compensation	120	11.	Executive compensation	126
12.	12.	Security ownership of certain beneficial owners and management and related unitholder matters	146	12.	Security ownership of certain beneficial owners and management and related unitholder matters	147
13.	13.	Certain relationships and related transactions, and director independence	148	13.	Certain relationships and related transactions, and director independence	150
14.	14.	Principal accounting fees and services	153	14.	Principal accounting fees and services	154

		PART IV			PART IV

15.	15.	Exhibits and Financial Statement Schedules	154	15.	Exhibits and Financial Statement Schedules	156

Index to exhibits	Index to exhibits		155	Index to exhibits		157

Signatures	Signatures		160	Signatures		162


Origin and Destination	Origin and Destination	Diameter (inches)	Length (miles)	Capacity (bpd)	Origin and Destination	Diameter (inches)	Length (miles)	Capacity (bpd)
Refined Product Pipelines:	Refined Product Pipelines:				Refined Product Pipelines:
Artesia, NM to Orla, TX to El Paso, TX	Artesia, NM to Orla, TX to El Paso, TX	8/12	221	95,000	Artesia, NM to Orla, TX to El Paso, TX	8/12	221	95,000
Artesia, NM to Moriarty, NM(1)	Artesia, NM to Moriarty, NM(1)	12/8	215	27,000	Artesia, NM to Moriarty, NM(1)	12/8	215	27,000
Moriarty, NM to Bloomfield, NM(1)(2)	Moriarty, NM to Bloomfield, NM(1)(2)	8	191	14,400	Moriarty, NM to Bloomfield, NM(1)(2)	8	191	14,400
Big Spring, TX to Abilene, TX	Big Spring, TX to Abilene, TX	6/8	100	20,000	Big Spring, TX to Abilene, TX	6/8	100	20,000
Big Spring, TX to Wichita Falls, TX	Big Spring, TX to Wichita Falls, TX	6/8	227	23,000	Big Spring, TX to Wichita Falls, TX	6/8	227	23,000
Wichita Falls, TX to Duncan, OK(6)	Wichita Falls, TX to Duncan, OK(6)	6	47	21,000	Wichita Falls, TX to Duncan, OK(6)	6	47	21,000
Midland, TX to Orla, TX	Midland, TX to Orla, TX	8/10	135	25,000	Midland, TX to Orla, TX	8/10	135	25,000
Artesia, NM to Roswell, NM(6)	Artesia, NM to Roswell, NM(6)	4	35	5,300	Artesia, NM to Roswell, NM(6)	4	35	5,300
Mountain Home, ID	Mountain Home, ID	4	13	6,000	Mountain Home, ID	4	13	6,000
Woods Cross, UT	Woods Cross, UT	10/12/8	10	70,000	Woods Cross, UT	10/12/8	10	70,000
Woods Cross, UT to Las Vegas, NV	Woods Cross, UT to Las Vegas, NV	12	427	62,000	Woods Cross, UT to Las Vegas, NV	12	427	62,000
Salt Lake City, UT to UNEV Pipeline, UT	Salt Lake City, UT to UNEV Pipeline, UT	10	1	60,000	Salt Lake City, UT to UNEV Pipeline, UT	10	1	60,000
Tulsa, OK(3)	Tulsa, OK(3)				Tulsa, OK(3)
Olathe, KS to Carrollton, MO					Olathe, KS to Carrollton, MO	8	81	15,000
Carrollton, MO to Montrose, IA					Carrollton, MO to Montrose, IA	8	139	10,000
Medicine Bow Pipeline					Medicine Bow Pipeline	6/10	205	30,000
Aurora (Chase connection) Pipeline					Aurora (Chase connection) Pipeline	10	15	30,000
Dupont (Kaneb connection) Pipeline					Dupont (Kaneb connection) Pipeline	8	3	24,000
Intermediate Product Pipelines:	Intermediate Product Pipelines:				Intermediate Product Pipelines:
Lovington, NM to Artesia, NM	Lovington, NM to Artesia, NM	8	65	48,000	Lovington, NM to Artesia, NM	8	65	48,000
Lovington, NM to Artesia, NM	Lovington, NM to Artesia, NM	10	65	72,000	Lovington, NM to Artesia, NM	10	65	72,000
Lovington, NM to Artesia, NM	Lovington, NM to Artesia, NM	16	65	98,400	Lovington, NM to Artesia, NM	16	65	98,400
Tulsa, OK(4)	Tulsa, OK(4)	8/10/12	7		Tulsa, OK(4)	8/10/12	7
Evans Junction to Artesia, NM(5)	Evans Junction to Artesia, NM(5)	8	12	107	Evans Junction to Artesia, NM(5)	8	12	107
Salvation Pipeline					Salvation Pipeline	8/12/8	114	18,000
Crude Pipelines:	Crude Pipelines:				Crude Pipelines:
Artesia Region Gathering	Artesia Region Gathering	Various	497	70,000	Artesia Region Gathering	Various	497	70,000
West Texas Gathering	West Texas Gathering	Various	305	35,000	West Texas Gathering	Various	305	35,000
Roadrunner Pipeline	Roadrunner Pipeline	16	69	80,000	Roadrunner Pipeline	16	69	80,000
Beeson Pipeline	Beeson Pipeline	8/10	46	95,000	Beeson Pipeline	8/10	46	95,000
El Dorado Crude Delivery Pipeline	El Dorado Crude Delivery Pipeline	16	4	165,000	El Dorado Crude Delivery Pipeline	16	4	165,000
Bisti Connection Pipeline	Bisti Connection Pipeline	12	13	82,000	Bisti Connection Pipeline	12	13	82,000
Whites City Pipeline	Whites City Pipeline	8	61	62,000	Whites City Pipeline	8	61	62,000
SLC Pipeline	SLC Pipeline	16	95	120,000	SLC Pipeline	16	95	120,000
Frontier Pipeline	Frontier Pipeline	16	289	72,000	Frontier Pipeline	16	289	72,000
Bairoil Pipeline					Bairoil Pipeline	8	41	15,000
Cheyenne Pipeline					Cheyenne Pipeline	10	94	36,000
Guernsey Pipeline					Guernsey Pipeline	10	115	50,000

Casper Pipeline					Casper Pipeline	10	102	34,000
Pathfinder Pipeline					Pathfinder Pipeline	16	103	65,000
Beaver Creek Pipeline					Beaver Creek Pipeline	4	10	7,000

Sand Draw Pipeline					Sand Draw Pipeline	8	61	18,000


		December 31,					December 31,
		2021		2020			2022		2021
		(In thousands)					(In thousands)
Balance Sheet Data	Balance Sheet Data					Balance Sheet Data
Cash and cash equivalents	Cash and cash equivalents	$	14,381	$	21,990	Cash and cash equivalents	$	10,917	$	14,381
Working capital	Working capital	$	17,461	$	14,247	Working capital	$	17,293	$	17,461
Total assets	Total assets	$	2,165,867	$	2,167,565	Total assets	$	2,747,502	$	2,165,867
Long-term debt	Long-term debt	$	1,333,049	$	1,405,603	Long-term debt	$	1,556,334	$	1,333,049
Partners' equity	Partners' equity	$	443,017	$	379,292	Partners' equity	$	857,126	$	443,017


	Years Ended December 31,
Equity Method Investment	2022		2021
	(In thousands)
Osage Pipe Line Company, LLC	$	(18,708)	$	3,889
Cheyenne Pipeline LLC	6,474		5,008
Cushing Connect Terminal Holdings LLC	3,325		3,535
Pioneer Investments Corp.	$	9,708	$	—
Saddle Butte Pipeline III, LLC	$	(1,059)	$	—
Total	$	(260)	$	12,432


		December 31, 2021		December 31, 2020			December 31, 2022		December 31, 2021
		(In thousands)					(In thousands)
Credit Agreement	Credit Agreement	$	840,000	$	913,500	Credit Agreement

Amount outstanding						Amount outstanding	$	668,000	$	840,000

5% Senior Notes	5% Senior Notes	500,000		500,000		5% Senior Notes
Principal	Principal	(6,951)		(7,897)		Principal	500,000		500,000
Unamortized debt issuance costs	Unamortized debt issuance costs	493,049		492,103		Unamortized debt issuance costs	(5,953)		(6,951)
							494,047		493,049
6.375% Senior Notes						6.375% Senior Notes
Principal						Principal	400,000		—
Unamortized debt issuance costs						Unamortized debt issuance costs	(5,713)		—
							394,287		—

Total long-term debt	Total long-term debt	$	1,333,049	$	1,405,603	Total long-term debt	$	1,556,334	$	1,333,049


				Payments Due by Period											Payments Due by Period
		Total		Less than 1 Year		1-3 Years		3-5 Years		Over 5 Years			Total		Less than 1 Year		1-3 Years		3-5 Years		Over 5 Years
		(In thousands)											(In thousands)
Long-term debt – principal	Long-term debt – principal	$	1,340,000	$	—	$	—	$	840,000	$	500,000	Long-term debt – principal	$	1,568,000	$	—	$	668,000	$	400,000	$	500,000
Long-term debt - interest	Long-term debt - interest	222,456		44,700		89,400		61,273		27,083		Long-term debt - interest	346,578		93,700		168,920		81,750		2,083
Site service fees	Site service fees	242,933		5,601		11,202		11,202		214,928		Site service fees	238,505		5,681		11,362		11,362		210,100
Pipeline finance lease	Pipeline finance lease	36,115		6,566		13,133		13,133		3,283		Pipeline finance lease	32,621		7,249		14,498		10,874		—
Right-of-way agreements and other	Right-of-way agreements and other	18,990		4,326		7,973		2,180		4,511		Right-of-way agreements and other	19,794		5,783		7,528		1,902		4,581
Total	Total	$	1,860,494	$	61,193	$	121,708	$	927,788	$	749,805	Total	$	2,205,498	$	112,413	$	870,308	$	505,888	$	716,764


			Page Reference

Report of Independent Registered Public Accounting Firm (PCAOB ID: 42)			7374

Consolidated Balance Sheets as of December 31, 202 12 and 202021			76

Consolidated Statements of Income for the years ended December 31, 202 12 , 20202 ~~and~~1 ~~201~~9a nd 2020			77

Consolidated Statements of Cash Flows for the years ended December 31, 202 12, 20202 1 and ~~201~~20920			78

Consolidated Statements of Equity for the years ended December 31, 202 12, 20202 1 and ~~201~~20920			79

Notes to Consolidated Financial Statements			80


		Common Units		Noncontrolling Interests		Total			Common Units		Noncontrolling Interests		Total
Balance December 31, 2018		$	427,435	$	88,126	$	515,561
Capital contribution		320		—		320
Balance December 31, 2019								Balance December 31, 2019	$	381,103	$	106,655	$	487,758

Capital contribution-Cushing Connect	Capital contribution-Cushing Connect	—		22,548		22,548		Capital contribution-Cushing Connect	—		23,899		23,899
Distributions to HEP unitholders		(273,225)		—		(273,225)
Distributions to noncontrolling interests		—		(9,000)		(9,000)
Purchase of units for incentive grants		(1,470)		—		(1,470)
Amortization of restricted and performance units		2,532		—		2,532
Class B unit accretion		(3,231)		—		(3,231)
Other		627		—		627
Net income		228,115		4,981		233,096
Balance December 31, 2019		381,103		106,655		487,758
Capital contribution-Cushing Connect		—		23,899		23,899
Capital contribution - Cheyenne		988		—		988
Capital contribution -Cheyenne								Capital contribution -Cheyenne	988		—		988
Distributions to HEP unitholders	Distributions to HEP unitholders	(174,443)		—		(174,443)		Distributions to HEP unitholders	(174,443)		—		(174,443)
Distributions to noncontrolling interests	Distributions to noncontrolling interests	—		(9,770)		(9,770)		Distributions to noncontrolling interests	—		(9,770)		(9,770)
Purchase of units for incentive grants	Purchase of units for incentive grants	(698)		—		(698)		Purchase of units for incentive grants	(698)		—		(698)
Amortization of restricted and performance units	Amortization of restricted and performance units	2,193		—		2,193		Amortization of restricted and performance units	2,193		—		2,193
Class B unit accretion	Class B unit accretion	(3,458)		—		(3,458)		Class B unit accretion	(3,458)		—		(3,458)
Other	Other	(334)		—		(334)		Other	(334)		—		(334)
Net income	Net income	173,941		5,282		179,223		Net income	173,941		5,282		179,223
Balance December 31, 2020	Balance December 31, 2020	379,292		126,066		505,358		Balance December 31, 2020	379,292		126,066		505,358
Capital contribution - Cushing Connect		—		23,194		23,194
Capital contribution-Cushing Connect								Capital contribution-Cushing Connect	—		23,194		23,194

Distributions to HEP unitholders	Distributions to HEP unitholders	(149,432)		—		(149,432)		Distributions to HEP unitholders	(149,432)		—		(149,432)
Distributions to noncontrolling interests	Distributions to noncontrolling interests	—		(10,743)		(10,743)		Distributions to noncontrolling interests	—		(10,743)		(10,743)
Purchase of units for incentive grants	Purchase of units for incentive grants	(1,958)		—		(1,958)		Purchase of units for incentive grants	(1,958)		—		(1,958)
Amortization of restricted and performance units	Amortization of restricted and performance units	2,557		—		2,557		Amortization of restricted and performance units	2,557		—		2,557
Class B unit accretion	Class B unit accretion	(3,699)		—		(3,699)		Class B unit accretion	(3,699)		—		(3,699)
Other	Other	(2,388)		1,797		(591)		Other	(2,388)		1,797		(591)
Net income	Net income	218,645		7,218		225,863		Net income	218,645		7,218		225,863
Balance December 31, 2021	Balance December 31, 2021	443,017		147,532		590,549		Balance December 31, 2021	443,017		147,532		590,549
Issuance of common units								Issuance of common units	349,020		—		349,020

Distributions to HEP unitholders								Distributions to HEP unitholders	(169,998)		—		(169,998)
Distributions to noncontrolling interests								Distributions to noncontrolling interests	—		(9,676)		(9,676)
Acquisition of remaining UNEV interests								Acquisition of remaining UNEV interests	19,735		(78,010)		(58,275)
Purchase of units for incentive grants								Purchase of units for incentive grants	(1,727)		—		(1,727)
Amortization of restricted and performance units								Amortization of restricted and performance units	1,845		—		1,845
Class B unit accretion								Class B unit accretion	(3,958)		—		(3,958)
Other								Other	(1,549)		744		(805)
Net income								Net income	220,741		9,164		229,905
Balance December 31, 2022								Balance December 31, 2022	857,126		69,754		926,880


	Balance at December 31, 2022
	Underlying Equity		Recorded Investment Balance		Difference
	(In thousands)
Equity Method Investments
Osage Pipe Line Company, LLC	$	2,901	$	29,773	$	(26,872)
Cheyenne Pipeline LLC	27,655		40,019		(12,364)
Cushing Connect Terminal Holdings LLC	49,915		34,746		15,169
Pioneer Investments Corp.	23,835		133,182		(109,347)
Saddle Butte Pipeline III, LLC	67,349		32,884		34,465
Total	$	171,655	$	270,604	$	(98,949)


	Balance at December 31, 2021
	Underlying Equity		Recorded Investment Balance		Difference
	(In thousands)
Equity Method Investments
Osage Pipe Line Company, LLC	$	9,996	$	37,782	$	(27,786)
Cheyenne Pipeline LLC	28,557		41,091		(12,534)
Cushing Connect Terminal Holdings LLC	52,203		37,505		14,698
Total	$	90,756	$	116,378	$	(25,622)


	Balance at December 31, 2020
	Underlying Equity		Recorded Investment Balance		Difference
	(In thousands)
Equity Method Investments
Osage Pipe Line Company, LLC	$	10,044	$	38,743	$	(28,699)
Cheyenne Pipeline LLC	29,103		42,345		(13,242)
Cushing Connect Terminal Holdings LLC	54,049		39,456		14,593
Total	$	93,196	$	120,544	$	(27,348)


Purchase Consideration (in thousands except for per share amounts)
HEP common units issued	21,000
Closing price per unit of HEP common units(1)	$	16.62
Purchase consideration paid in HEP common units	349,020
Cash consideration paid by HEP	325,000
Working capital adjustment payment by HEP(2)	3,955
Total cash consideration	328,955
Total purchase consideration	$	677,975


						(In thousands)
Assets Acquired
Accounts receivable						3,005
Prepaid and other current assets						59
Properties and equipment						340,682
Operating lease right-of-use assets						105
Other assets						3,500
Goodwill						119,112
Equity method investments						229,891
Total assets acquired						696,354

Liabilities Assumed
Accounts payable						1,528
Accrued property taxes						973
Other current liabilities						789
Operating lease liabilities						33
Noncurrent operating lease liabilities						72
Other long-term liabilities						14,984
Total liabilities assumed						18,379
Net assets acquired						677,975


Years Ending December 31,	Years Ending December 31,	(In millions)		Years Ending December 31,	(In millions)
2022		312
2023	2023	275		2023	301
2024	2024	238		2024	265
2025	2025	172		2025	184
2026	2026	157		2026	169
2027				2027	136
Thereafter	Thereafter	484		Thereafter	401
Total	Total	$	1,638	Total	$	1,456


		Year Ended December 31, 2021		Year Ended December 31, 2020			Year Ended December 31, 2022		Year Ended December 31, 2021
		(In thousands)					(In thousands)
Cash paid for amounts included in the measurement of lease liabilities:	Cash paid for amounts included in the measurement of lease liabilities:					Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows on operating leases	Operating cash flows on operating leases	$	1,142	$	1,024	Operating cash flows on operating leases	$	1,062	$	1,142
Operating cash flows on finance leases	Operating cash flows on finance leases	$	4,104	$	4,312	Operating cash flows on finance leases	$	4,255	$	4,104
Financing cash flows on finance leases	Financing cash flows on finance leases	$	3,549	$	3,602	Financing cash flows on finance leases	$	3,743	$	3,549


		December 31, 2021					December 31, 2022
		Operating		Finance			Operating		Finance
		(In thousands)					(In thousands)
2022		$	690	$	7,228
2023	2023	603		7,374		2023	$	1,028	$	7,925
2024	2024	497		6,929		2024	608		7,504
2025	2025	443		6,470		2025	491		7,044
2026	2026	289		6,425		2026	326		7,165
2027						2027	205		6,448
2027 and thereafter	2027 and thereafter	501		67,463		2027 and thereafter	318		61,038
Total lease payments	Total lease payments	3,023		101,889		Total lease payments	2,976		97,124
Less: Imputed interest	Less: Imputed interest	(373)		(33,454)		Less: Imputed interest	(288)		(30,222)
Total lease obligations	Total lease obligations	2,650		68,435		Total lease obligations	2,688		66,902
Less: Current lease liabilities	Less: Current lease liabilities	(620)		(3,786)		Less: Current lease liabilities	(968)		(4,389)
Long-term lease liabilities	Long-term lease liabilities	$	2,030	$	64,649	Long-term lease liabilities	$	1,720	$	62,513


	(In thousands)

Net investment in leases	$	234,736
Properties and equipment, net	(234,736)

Gain on sales-type leases	$	—


	(In thousands)

Net investment in leases	148,419
Properties and equipment, net	(130,301)
Deferred Revenue	6,559
Gain on sales-type leases	$	24,677


	~~(In thousands)~~

~~Net investment in leases~~	$	~~35,319~~
~~Properties and equipment, net~~	~~(1,485)~~

~~Gain on sales-type leases~~	$	~~33,834~~


		Operating		Finance		Sales-type			Operating		Finance		Sales-type
Years Ending December 31,	Years Ending December 31,	(In thousands)						Years Ending December 31,	(In thousands)
2022		$	283,882	$	2,171	$	42,102
2023	2023	253,424		2,175		38,196		2023	$	271,439	$	2,243	$	103,876
2024	2024	217,321		2,192		34,967		2024	241,746		2,226		100,580
2025	2025	153,900		2,209		31,539		2025	165,560		2,244		97,153
2026	2026	139,983		2,227		31,539		2026	151,015		2,262		97,153
2027								2027	118,472		2,280		97,153
Thereafter	Thereafter	418,354		36,610		247,867		Thereafter	346,975		34,940		820,234
Total lease payment receipts	Total lease payment receipts	$	1,466,864	47,584		426,210		Total lease payment receipts	$	1,295,207	46,195		1,316,149
Less: Imputed interest	Less: Imputed interest			(31,213)		(357,682)		Less: Imputed interest			(29,931)		(1,189,628)
				16,371		68,528					16,264		126,521
Unguaranteed residual assets at end of leases	Unguaranteed residual assets at end of leases			—		229,337		Unguaranteed residual assets at end of leases			—		402,934
Net investment in leases	Net investment in leases			$	16,371	$	297,865	Net investment in leases			$	16,264	$	529,455


	Useful Life	December 31, 2021		December 31, 2020
		(In thousands)
Delek transportation agreement	30 years	$	59,933	$	59,933
HFC transportation agreements	10-15 years	75,131		75,131
Customer relationships	10 years	69,683		69,683
Other	20 years	50		50
		204,797		204,797
Less accumulated amortization		(131,490)		(117,482)
Intangible assets, net		$	73,307	$	87,315


Phantom Units	Phantom Units	Units	Weighted- Average Grant-Date Fair Value		Phantom Units	Units	Weighted- Average Grant-Date Fair Value
Outstanding at January 1, 2021 (nonvested)		295,992	$	14.48
Outstanding at January 1, 2022 (nonvested)					Outstanding at January 1, 2022 (nonvested)	203,263	$	14.85

Granted	Granted	51,670	18.93		Granted	84,705	18.57
Vesting and transfer of common units to recipients	Vesting and transfer of common units to recipients	(137,566)	15.56		Vesting and transfer of common units to recipients	(105,031)	16.88
Forfeited	Forfeited	(6,833)	15.54		Forfeited	(67,128)	13.26
Outstanding at December 31, 2021 (nonvested)		203,263	14.85
Outstanding at December 31, 2022 (nonvested)					Outstanding at December 31, 2022 (nonvested)	115,809	16.66


Performance Units						Units
Outstanding at January 1, ~~2021~~2022 (nonvested)						~~77,472~~76,719
Granted						~~10,128~~10,698
Vesting and transfer of common units to recipients						~~(10,881)~~(35,441)
Forfeited						(9,124)
Outstanding at December 31, ~~2021~~2022 (nonvested)						~~76,719~~42,852


December 31, 2021	Parent		Guarantor Restricted Subsidiaries		Non-Guarantor Non-Restricted Subsidiaries		Eliminations		Consolidated
	(In thousands)
ASSETS
Current assets:
Cash and cash equivalents	$	1,273	$	(899)	$	14,007	$	—	$	14,381
Accounts receivable	—		60,418		8,816		(335)		68,899

Prepaid and other current assets	353		9,680		1,304		(304)		11,033
Total current assets	1,626		69,199		24,127		(639)		94,313

Properties and equipment, net	—		1,026,912		302,116		—		1,329,028
Operating lease right-of-use assets	—		2,189		86		—		2,275
Net investment in leases	—		309,301		100,032		(100,030)		309,303
Investment in subsidiaries	1,785,024		301,721		—		(2,086,745)		—
Intangible assets, net	—		73,307		—		—		73,307
Goodwill	—		223,650		—		—		223,650
Equity method investments	—		78,873		37,505		—		116,378
Other assets	8,118		9,495		—		—		17,613
Total assets	$	1,794,768	$	2,094,647	$	463,866	$	(2,187,414)	$	2,165,867

LIABILITIES AND PARTNERS’ EQUITY
Current liabilities:
Accounts payable	$	—	$	28,447	$	12,168	$	(335)	$	40,280

Accrued interest	11,258		—		—		—		11,258
Deferred revenue	—		14,085		500		—		14,585
Accrued property taxes	—		3,364		1,178		—		4,542
Current operating lease liabilities	—		545		75		—		620
Current finance lease liabilities	—		5,566		—		(1,780)		3,786
Other current liabilities	3		1,513		265		—		1,781
Total current liabilities	11,261		53,520		14,186		(2,115)		76,852

Long-term debt	1,333,049		—		—		—		1,333,049
Noncurrent operating lease liabilities	—		2,030		—		—		2,030
Noncurrent finance lease liabilities	—		156,102		—		(91,453)		64,649
Other long-term liabilities	340		11,760		427		—		12,527
Deferred revenue	—		29,662		—		—		29,662
Class B unit	—		56,549		—		—		56,549
Equity - partners	450,118		1,785,024		301,721		(2,093,846)		443,017
Equity - noncontrolling interests	—		—		147,532		—		147,532
Total liabilities and partners’ equity	$	1,794,768	$	2,094,647	$	463,866	$	(2,187,414)	$	2,165,867


Year Ended December 31, 2020	Parent		Guarantor Restricted Subsidiaries		Non-Guarantor Non-Restricted Subsidiaries		Eliminations		Consolidated
	(In thousands)
Revenues:
Affiliates	$	—	$	374,108	$	25,701	$	—	$	399,809
Third parties	—		77,039		21,000		—		98,039
	—		451,147		46,701		—		497,848
Operating costs and expenses:
Operations (exclusive of depreciation and amortization)	—		132,393		15,299		—		147,692
Depreciation and amortization	—		82,442		17,136		—		99,578
General and administrative	3,227		6,762		—		—		9,989
Goodwill Impairment	—		35,653		—		—		35,653		35,653
	3,227		257,250		32,435		—		292,912
Operating income (loss)	(3,227)		193,897		14,266		—		204,936
Equity in earnings of subsidiaries	254,608		15,409		—		(270,017)		—
Equity in earnings of equity method investments	—		5,105		1,542		—		6,647
Interest income	26		10,578		17		—		10,621
Interest expense	(55,298)		(4,126)		—		—		(59,424)
Gain on sales-type lease	—		33,834		—		—		33,834
Loss on early extinguishment of debt	(25,915)		—		—		—		(25,915)
Gain on sale of assets and other	289		3,535		4,867		—		8,691

	173,710		64,335		6,426		(270,017)		(25,546)
Income (loss) before income taxes	170,483		258,232		20,692		(270,017)		179,390
State income tax expense	—		(167)		—		—		(167)
Net income (loss)	170,483		258,065		20,692		(270,017)		179,223
Allocation of net income attributable to noncontrolling interests	—		(3,457)		(5,283)		—		(8,740)
Net income (loss) attributable to the Partnership	170,483		254,608		15,409		(270,017)		170,483
Other comprehensive income (loss)	—		—		—		—		—
Comprehensive income (loss) attributable to the Partnership	$	170,483	$	254,608	$	15,409	$	(270,017)	$	170,483


Year Ended December 31, 2019	Parent		Guarantor Restricted Subsidiaries		Non-Guarantor Non-Restricted Subsidiaries		Eliminations		Consolidated
	(In thousands)
Revenues:
Affiliates	$	—	$	386,517	$	25,233	$	—	$	411,750
Third parties	—		94,083		26,944		—		121,027
	—		480,600		52,177		—		532,777
Operating costs and expenses:
Operations (exclusive of depreciation and amortization)	—		147,387		14,609		—		161,996
Depreciation and amortization	—		79,516		17,189		—		96,705
General and administrative	3,184		7,067		—		—		10,251
	3,184		233,970		31,798		—		268,952
Operating income (loss)	(3,184)		246,630		20,379		—		263,825
Equity in earnings (loss) of subsidiaries	302,148		15,351		—		(317,499)		—
Equity in earnings of equity method investments	—		5,320		(140)		—		5,180
Interest income	—		5,517		—		—		5,517
Interest expense	(74,375)		(2,448)		—		—		(76,823)
Gain on sales-type lease	—		35,166		—		—		35,166

Gain on sale of assets and other	295		(116)		93		—		272
	228,068		58,790		(47)		(317,499)		(30,688)
Income (loss) before income taxes	224,884		305,420		20,332		(317,499)		233,137
State income tax expense	—		(41)		—		—		(41)
Net income (loss)	224,884		305,379		20,332		(317,499)		233,096
Allocation of net income attributable to noncontrolling interests	—		(3,231)		(4,981)		—		(8,212)
Net income (loss) attributable to the Partnership	224,884		302,148		15,351		(317,499)		224,884
Other comprehensive income (loss)	—		—		—		—		—
Comprehensive income (loss) attributable to the Partnership	$	224,884	$	302,148	$	15,351	$	(317,499)	$	224,884


Year Ended December 31, 2022	Parent		Guarantor Restricted Subsidiaries		Non-Guarantor Non-Restricted Subsidiaries		Eliminations		Consolidated
	(In thousands)
Revenues:
Affiliates	$	—	$	438,280	$	—	$	—	$	438,280
Third parties	—		109,200		—		—		109,200
	—		547,480		—		—		547,480
Operating costs and expenses:
Operations (exclusive of depreciation and amortization)	—		206,945		3,678		—		210,623
Depreciation and amortization	—		99,092		—		—		99,092
General and administrative	3,777		13,226		—		—		17,003

	3,777		319,263		3,678		—		326,718
Operating income (loss)	(3,777)		228,217		(3,678)		—		220,762
Equity in earnings of subsidiaries	299,319		8,071		—		(307,390)		—
Equity in earnings of equity method investments	—		(3,585)		3,325		—		(260)
Interest expense	(78,759)		(20,296)		—		16,495		(82,560)
Interest income	—		91,406		16,495		(16,495)		91,406


Gain on sale of assets and other	—		668		—		—		668
	220,560		76,264		19,820		(307,390)		9,254
Income (loss) before income taxes	216,783		304,481		16,142		(307,390)		230,016
State income tax expense	—		(111)		—		—		(111)
Net income (loss)	216,783		304,370		16,142		(307,390)		229,905
Allocation of net income attributable to noncontrolling interests	—		(5,051)		(8,071)		—		(13,122)
Net income (loss) attributable to the Partnership	216,783		299,319		8,071		(307,390)		216,783


Name	Age	Position with HLS
Michael C. Jennings	5657	Chief Executive Officer
~~Richard L. Voliva III~~	44	and President
John Harrison	4344	Senior Vice President, Chief Financial Officer and Treasurer
Robert I. Jamieson	58	Senior Vice President and Chief Operating Officer
Vaishali S. Bhatia	3940	Senior Vice President, General Counsel and Secretary